Today on USDJPY – Daily and H4 charts support Short trades.

On the Daily chart above, as with other higher time frame charts (Weekly and Monthly), it’s very much apparent that we are in a strong downtrend. The bears seem unrelenting. From a day-trade perspective, the scenario is not in any way different: a major support level – the most recent Daily swing low – @ 88.22 (which we’ve highlighted using the blue broken line) has been breached. That price action indicates price is still prepared to move further downward. The year’s low @ 87.10 (not visible on the Daily chart) is currently about a 100 pips away, hence there seems to be enough room for the downward move – again, that’s from a day-trade perspective.
However, let’s be wary of the 88.00 level as it is an area where some institutional traders have “large stop-loss sales lurked.”

On the H4 chart above, price has broken the most recent swing low @ 88.61 (which we’ve highlighted using the blue broken line) downward. That automatically sustains our bias in favor of a downward price move. The white horizontal line @ 89.03 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.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.