USDJPY has been dropping dramatically since last week.
Nikkei has also dropped 4.15% (-807 Yen) as of 1:30AM (EST).
We wonder how low will USDJPY drop? London will open in a few hours. Will the price go up, or down?
Looking at the H4 chat below, we can say the price has been in the range bound between 120.50 – 125.50, and currently at the bottom of this range.
We have to monitor if the price shows some kind of reversal price actions.
I was Bear with this pair last week, due to the Bearish Divergence on the Daily Stochastic. But now, after the huge drop, I am Bull on a long term. Thus I would like to look for the Long opportunity, and the current Support level can be a sweet spot.
Looking at M15 chart, however, the chart shows no sign to go up, riding 21EMA – VERY BEARISH. Therefore it may take a long time, before the price forms the bottom.
Even on M5 chart (below), it didn’t show any reversal sign yet. But the price is riding 55EMA. So I have to watch if it is forming Higher low or Double bottom, followed by Higher High. In theory, I could buy this pair from the next Higher Low. But hey, this down movement is very strong. I cannot buy this pair only based on M5 chart. I will also check M15 chart (or even H1 chart) looking for Higher High, to be ready to buy.
Please remember, the price may drop further.
All I would like to tell you is that I am Long-Term Bull with this pair, and eventually it should stop dropping. So as a currency trader, I will keep monitoring when that happens.
YJ Baik – Forex.Today @ Tokyo