Post of the Day: USDJPY Resistance
I have the following chart of USD/JPY. There was a breakout of the downside, but the price went up. It's like the floor was tested, but there is upward pressure. I would think a trade would be to go long. I'm I right?
Power Course Instructor’s Response:
Take a look at the chart below...
Even though this USDJPY pair has been in a bullish cycle for a while, the trend bias on the pair is to the downside...note how the 200 SMA has been respected and price action is still trading below it and moving away from it. Also note that resistance at 100.00 (strong psychological level) is lining up with the 200 SMA.
Once that candle closes below trendline support, short positions would be the higher probability trades since the pair is now trading back into to its bearish trend.
Taking a look at a Daily 1 year chart, we can see again that the overall downtrend is still in place.