- USD/JPY bears stepping in at a critical resistance level.
- Bears will seek a break of the near term hourly support for a downside continuation.
USD/JPY has met resistance in an effort to correct from the recent structure lows which opens the prospects of a downside continuation on a restest of and break of the support structure.
The following illustrates the mechanics for such an outcome from an hourly perspective and down to the 15 and 5-minute charts.
USD/JPY hourly chart
The hourly chart is bearish below the 21-SMA and trendline resistance.
A break of support following the test or the 50% mean reversion level opens the risk of a retest of a structure and a subsequent downside follow-through.
USD/JPY 15-min chart
The Momentum indicator is still in bullish territory and it will not be until the 8 open vs 8 close cross-over that bears will seek to fully engage.
USD/JPY 5-min chart
The 5-min chart shows that there is still the potential of a restest of the resistance before the market either breaks higher or melts in favour of the bearish thesis.
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