Today on USDJPY – Daily and H4 charts support Short trades, but…

On the Daily chart above, last week Friday, we discussed the possibility of a bearish retracement based on certain signals – one of which was a waving negative MACD Divergence. Although, as earlier said, a waving MACD Divergence is relatively not a very strong indicator of future price movement, it was however good enough to caution us.
With recent events, it turned out the bearish signals were helpful as price has been in a bearish mode for a couple of days now. From a medium term perspective, our bullish bias remains intact until price breaks below a critical support level – the most recent Daily swing low @ 91.24 (which we’ve highlighted using the blue broken line). Contrastingly, from a day-trade perspective, which is our focus on this thread, our bias has shifted in favor of the bears. However, price’s downward move is getting close to the critical support level @ 91.24, and the bears might experience difficulties breaking below it. Due to this proximity of current price position to the support level, more conservative traders might prefer to wait and see price break below it before seeking Hourly Short trade setups – supported by the H4 chart.

On the H4 chart above, price has breached the most recent swing low @ 91.80 (which we’ve highlighted using the upper blue broken line) downward. That automatically sustains our bias in favor of a downward price move.
We could observe, more clearly, the now valid negative MACD Divergence: that gives additional support to the current downward movement. We could also observe on the H4 chart the important 91.24 support level (which we’ve highlighted using the lower blue broken line) that we discussed on the Daily chart. Price is currently about 60 pips away from the support level; hence, for more aggressive traders, there seems to be enough room to go short on this currency pair based on the Hourly setups.
The white horizontal line @ 92.65 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.