The USD/JPY Forex pair has recently given a very strong bearish signal for the next few days. Take a look at the daily chart and the corresponding red circles used to highlight said signals:
The USD/JPY pair had been going bearish for weeks, however after many days of an upward trend, it appears to have reached the daily 200 EMA line. This, combined with an RSI level of over 70, pairs for a very nice bearish downward signal. The MACD also appears to be crossing its’ own signal line soon. Also adding to the strength of the bearish move.
There are also several real world events that will undoubtedly influence the strength of the USD as well. Another great signal is the ‘shooting-star’ candle pattern seen piercing though the 200 EMA, which is widely recognized as a reliable pattern that indicates a shift in market direction.
Looking to more immediate moves, if we check out the USD/JPY 4-Hr chart here is what we see:
We have a visual confirmation that in the short-term the pair is declining, however it is approaching the 200 EMA for the 4-Hr chart, which with most likely be a resistance point even if it is for a short time. Ultimately, we believe that setting a pending market order for sell stop passed the 4-hr, 200 EMA line is best if you are looking to sell USD/JPY across this week and next week.
PREDICTION: If the USD/JPY price breaks the 4-Hr charts’ 200 EMA line, it will continue to substantially decline over the next few days assuredly.
It may still continue to decline based on the daily chart’s signals, however, without puncturing the 200 EMA on the 4-Hr chart this process may take much longer.