Short Trade set-up on USDJPY Hourly chart.

There’s currently a Short trade set-up on the USDJPY Hourly chart. I’ll give a top-down analysis – starting with the Daily chart:

On the Daily chart above, as discussed earlier this week, we could see that the USDJPY pair has been in downward channel formation since the second week of last month (August). Price has been travelling gradually toward the lower edge of the channel, and there seems to be enough room for price to continue its move southward: a major support – the Weekly chart most recent swing low @ 91.70 (which we’ve highlighted using the blue broken line) is still some pips away. Also, price has broken below the previous day low. The current price behavior is good enough to sustain our bias for a downward price move – from a day trade perspective.

On the H4 chart above, price has broken the most recent swing low @ 92.53 (which we’ve highlighted using the blue broken line) downward. That sustains our bias in favor of a downward price move. The white horizontal line @ 93.04 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

The Hourly chart above is currently forming a tradable pattern. Price bottomed @ 91.93 and it has started its retracement upward. We expect price to retrace to the area between 92.49 and 93.03 (which is the area between the 50% and 100% fib. retracement levels – drawn from the most recent Hourly swing high to the current price-bottom). NOTE that price has reached the 50% fib. ret. already. Let’s seek to sell around this area. If price exceeds the 93.03 level upward, our bearish bias is no more valid and we enter a no-trading zone. Our primary profit target is @ 91.63 (the 127% fib. ext.).

The 15min. chart above gives us a clearer view of the Hourly price action and the potential areas to sell (please note it’s advisable to set a Limit order ahead of time as price could move up to these levels and reverse sharply in our favor).
This chart is rather cluttered but if we look closely, there are a couple of potential reversal levels available. You choose your preferred level based on your personality.

fib 50% ret. @ 92.49 (you would be in the trade already if you chose this level – please manage your trade properly);
fib 78.6% ret. @ 92.80.

Initial Stop Loss @ 93.07; primary Profit target @ 91.63 (Please remember to factor in your broker’s pip-spread).

Please note that these Fibonacci (fib.) levels have other pivots, overlapping fibs or previous highs/lows supporting them (they are the cause of this cluttered chart). As such, price could reverse at any of the points. The issue here is that the higher the fib level you choose to sell from, the smaller the pips you’ll risk and the more your pip-profit; BUT, also the more the likelihood of you missing the trade as price might not retrace that high before moving back downward.
You need your own discretion here.

Please keep your risk low. Don’t risk more than 2% of your capital. Personally, I risk about 0.5% per trade; and each trade has a potential profit target of 1% or more – based on my exit levels.
We MUST NEVER assume we KNOW where price is going next!

P.S.:
Also, always keep in mind any major news releases. Be wary of possible price volatility during these periods.