USD/JPY – Dollar Moving Lower Again?

USD/JPY (120.356)

Three points to consider

• Sellers come back into picture after Dollar tests the rising trend line.
• Waiting for correction lower to take on a long USD trade.
• Trade Strategy: Stand Aside

The USD/JPY Forex market is once again crawling lower after sellers took this Forex market below the pivot at ¥120. Prices recovered for a brief test of the rising trend line after dropping to test the handle near ¥116. This occurred after crashing through the trend line, visible on the below USD/JPY daily MT 4 chart below. This move higher appears corrective after testing the support, now resistance level and moving back south.

Technical Analysis

Now let’s look at today’s daily USD/JPY technical analysis. There is near term resistance lining up at 120.40. A daily close above this level challenges the technical resistance at 121.71 (August 28 high). The alternative USD/JPY technical analysis, should the US Dollar push back lower, notes technical support at 119.55. A break below this technical level challenges the next technical support level lining up at 118.20.

Trade Strategy

Let’s look at today’s USD/JPY trade strategy. Price action is not very conclusive right now. There is now long or short USD trade opportunity at this time. The speed of the recovery since breaking below ¥120 does cast doubt on a long term down trend. Especially since this Forex market went back above the former support, now resistance at 119.55. Also the long term uptrend originating from September 2012 is still viable and happening. This means the current move lower is a simple correction. Keeping this in mind, I will opt to stand aside for a long USD trade opportunity to come along. For today, I am flat in the USD/JPY Forex market.