The USD/JPY Tests Support at 113.46

Talking Points The USDJPY has Declined 52 Pips in Early Trading Bearish Breakouts Begin Under 113.14 Sentiment for the


Talking Points

  • The USDJPY has Declined 52 Pips in Early Trading
  • Bearish Breakouts Begin Under 113.14
  • Sentiment for the USD/JPY is Extreme with SSI Reading +2.19

USD/JPY 30 Minute Chart

The USD/JPY Tests Support at 113.46

(Created using Marketscope 2.0 Charts)

What are Yen crosses in store for next? Sign up for our FREE Yen Forecast

The USD/JPY is trading near values of support after declining as much as 52 pips on the day. Currently range support is found near the S3 pivot point, which is found near 113.46. In the event that prices continue to consolidate, it opens the possibility that the USD/JPY may attempt to bounce towards values of resistance. With today’s range measuring 62 pips, range resistance is found at the R3 pivot at a price of 114.08. Final resistance for the day is found at the R4 pivot point at price of 114.40. If the USD/JPY trades above this value it would be significant as it would be the first bullish price breakout for the pair in the last six trading sessions.

Suggested articles

Going Past the Great Wall: Things to Consider When Entering the Asian MarketGo to article >>

Alternatively, if prices break below the S3 pivot point, next support is found at 113.14. This value is represented in the graph above as today’s S4 pivot. A move below 113.14 would also be considered significant, as prices would be challenging the current monthly low at 113.12. If prices trade breakout below the S4 pivot, traders may extrapolate a 1X extension of today’s 62 pip range to put initial targets near 112.52.

It should be noted that sentiment readings for the USD/JPY remain at extremes. SSI (Speculative Sentiment Index) for the pair is currently reading at +2.19. With 68% of positioning long, this is generally taken as a bearish signal. If USD/JPY price action continues to decline, this value would be expected to remain at a positive extreme. Conversely, in the event of a bullish reversal, traders would look for SSI to read at values that are more neutral.

To Receive Walkers’ analysis directly via email, please SIGN UP HERE

See Walker’s most recent articles at his Bio Page.

Do you know the biggest mistake traders make? More importantly, do you know how to overcome the biggest mistake? Read page 8 of the Traits of Successful Traders Guide to find out [free registration required].

Contact and Follow Walker on Twitter @WEnglandFX.

original source

By: Walker England, Forex Trading Instructor
Got a news tip? Let Us Know