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

On the Daily chart above, for the past one week, price has been trending southward – in agreement with the longer term down trend. Yesterday, price decisively broke below the lower edge of the symmetrical triangle as the trading day ended with a strong bear-bodied candle. As a result, that strengthened the notion that the longer term bearish trend has probably resumed. From a day-trade perspective, our bearish bias remains intact.
However, there are two critical support levels that we expect price to break below for us to be more confident that the overall bearish trend has resumed: the first is the usual previous day’s low, which, in the case of this currency pair today, is @ 88.79 (not highlighted), and the most recent Daily swing low @ 88.58 (which we’ve highlighted using the blue broken line). For more conservative traders, it’s advisable to avoid seeking Hourly Short trade setups – supported by the H4 chart – till the coast is clear.

On the H4 chart above, price broke, at that time, the most recent swing low @ 89.91 (which we’ve highlighted using the upper blue broken line) downward. That automatically sustained our bias in favor of a downward price move. As discussed on the Daily chart, to be convinced of the bears’ readiness to continue their activity, especially for more conservative traders, it’s preferable to see price break below the most recent swing low – also the previous day’s low @ 88.79 (which we’ve highlighted using the lower blue broken line).
The white horizontal line @ 90.35 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.