Dear Traders,

We have a new week, Gap down on Monday opening with USDJPY.   However, not only has this pair closed the gap, but further more, it kept going up.

Soon, we will have to decide whether it will be a good sell zone, or change to buy this pair.

You know I am a big fan of Divergence.   I see “many” of them with USDJPY.  All of them are “Bullish Divergence”  !!

Below is H4 chart.   We see a clear “Bullish Divergence” on the Stochastic.  (The bottom of the Stochastic is up, while the bottom of the prices is down)



Hourly chart is more interesting.


We see “Bullish Divergence”s on both Stochastic and MACD !


So am I going to change the bias to Bull, and start buying this pair?    Well, my long term bias is Bull.  However, this pair has to prove a lot more, before I can believe it is going up.

Here are reasons why I have to stick to “Sell setups”.

a) On H4/H1 charts, 21/55 EMAs are still looking down,
b) On H4 chart, the price is still riding 21 EMA. On H1 chart, the price is still riding 55EMA.
c) On H4/H1 charts, we haven’t seen Higher High, nor Higher Low
d) On H4 chart above, you can see the current level is Fibinacci 38.2% of the recent drop.  So it could be a nice sell-zone.


I have to confess though, my long term bias (Bull) is pleased to see these Bullish Divergences.  So I want to believe the up-trend is back.  But I can’t!   🙂


OK, USDJPY!   Show me.   Show me you can go up.  Then I will believe you.


At least I want to see the break of the previous high (119.63).  If it breaks, then I will buy from the pullback.

However, if USDJPY cannot break 119.63, I will consider USDJPY is a) Range Bound of (118.80 – 119.60), or b) still Down Trend.  In any case, I will sell from 119.60 ish, until 118.80.


Hope the above discussion will help you develop your own trade plans.


YJ Baik – Forex.Today @ Tokyo









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