29.10.202011:15 Forex Analyse & Reviews: Technical analysis of USD/JPY for October 29, 2020

Exchange Rates 29.10.2020 analysis

Overview :

The USD/JPY pair continues to move downwards from the level of 104.75. Yesterday, the pair dropped from the level of 104.75 to the bottom around 104.13. But the pair has rebounded from the bottom of 104.13 to close at 104.23.

Today, the first support level is seen at 104.13, the price is moving in a bearish channel now. Furthermore, the price has been set below the strong resistance at the level of 104.75, which coincides with the 38.6% Fibonacci retracement level.

This resistance has been rejected several times confirming the veracity of a downtrend. Additionally, the RSI starts signaling a downward trend. This would suggest a bearish market because the RSI indicator is still in a negative spot and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 104.13 in order to test the last bearish wave of yesterday.

Thus, amid the previous events, the price is still moving between the levels of 104.75 and 104.13. If the USD/JPY pair fails to break through the resistance level of 104.75, the market will decline further to 104.13 as as the first target.

Therefore, there is a possibility that the USD/JPY pair will move downside and the structure of a fall does not look corrective. The trend is still below the 100 EMA for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside.

As a result, if the USD/JPY pair is able to break out the first support at 104.13, the market will decline further to 103.70 in order to test the weekly support 2. Consequently, the market is likely to show signs of a bearish trend. So, it will be good to sell below the level of 104.13 with the first target at 103.70 and further to 103.35.

However, stop loss should always be taken into account, accordingly, it will be beneficial to set the stop loss above the last bullish trend at 105.14.

Taking everything into account, we still prefer the bearish scenario which suggests that the pair will stay below the zone of 104.75 this week.

Analysis tip :

If the trend is be able to hit the daily pivot point (because of a market bounce in next day), it will of the wisdom to sell as the we did on the weekly strategy. Sometimes, it uses in a daily trade to stop long position and open a new short position. It should be noted that we combine the daily pivot point, weekly pivot point strategies and sentiment analysis to trade.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Uitgevoerd door Mourad El Keddani,
Analytische expert
InstaForex Group © 2007-2020
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