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

On the Daily chart above, since yesterday, we’ve not seen much change based on our view of recent activities on the USDJPY pair: probably due to the lower edge of the downward or bearish channel, which we discussed earlier, yesterday’s price action ended in a bullish mode – creating an “inside candle” reversal candle pattern in the process. However, because of the Asian news that was released during early hours of today, price movement got rather volatile and, consequently, distorted the “ordered” story that was unfolding on the Daily chart as price collapsed sharply to break below the “inside candle” @ 89.77 (which we’ve highlighted using the blue broken line) – an action that weakened the strength of the reversal candle pattern.
Although, our bias remains bearish from a day trade perspective, price is yet to break decisively below the lower edge of the bearish channel; hence the coast remains to be very clear for us for us to seek Short trade setups on the Hourly chart – supported by the H4 chart.

On the H4 chart above, price broke the most recent swing low @ 89.94 (which we’ve highlighted using the blue broken line) downward. That automatically sustains our bias in favor of a downward price move. However, we would observe that price is struggling to stay below the 89.94 level as it was forced to sharply retrace upward after the initial break. That price action tells us, just as with yesterday’s, that the bears are still under threat. In all, our bias is still bearish, but the coast isn’t too clear.
The white horizontal line @ 90.56 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, for more aggressive traders, 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.