USDJPY is inversely correlated to GOLD. Reason being, Gold and JPY both are safe havens. JPY has been in demand after the Covid.

On a technical standpoint, Daily is a in a bearish structure right now, resting on a resistance level.

Now we will lower the time frame to H4 for more confined trading plan.

- Market structure: Market structure for USDJPY is still bearish. The support zone of 110.45 was breached earlier, which is now being tested as resistance. This level is a strong level as previously it has had a swing move upwards.

- Trendline: USDJPY is forming a bearish rising wedge. The breakout from the ascending trendline will trigger further sell pressure, eventually bringing the pair down.

- Retracement: The golden retracement area of 75-78.6% stands aligned with the resistance area. This gives us two confirmations to short USDJPY. We can target profit till the 0% level of retracement in this case.

- EMA's: EMA 50 is bearish, above the current market. Where as, EMA 200 is bullish, currently, below the market. EMA 50 is being tested at the resistance, giving up a 3rd confirmation for shorts. Although EMA 200 hovers below the market signaling bullish move, we anticipate market piercing this EMA to further go down. Also, having three confluences to go short has a high probability than to go long on EMA only.

- RSI/CCI: RSI and CCI both have bearish numbers until they cross 50 and 0 respectively. There was no divergence for the sells. USDJPY continues to hover below RSI 50 and CCI 0, indicating room to push down.

Our trading plane usually constitutes of having 3-4 confirmations. In this case of USDJPY, we have three confirmations to go short at $110.45. The anticipated target for this short is at $109.70 while the SL is at $110.80.

If this resistance is breached, our trading plan is invalidated and we move ahead for a new plan for USDJPY.

USDJPY shorts

Jul 13 2021