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Talking Points

  • USD/JPY Technical Strategy: Sidelines Preferred
  • Intraday Pullback Warns of A ‘False Breakout’
  • Dojis Highlight Indecision Amongst Traders

USD/JPY continues to keep traders in suspense as it probes below 104.00 in intraday trade – warning of ‘false breakout’. A close of the current candle would be required to signal the bulls had lost their grip on the pair. However, the potential for a sustained correction may be limited given bearish reversal candlestick formations are lacking. Buyer’s interest would likely be renewed on a retest of the psychologically-significant 103.00 floor.

USD/JPY: Awaiting Close of Candle to Confirm ‘False Breakout’

USD/JPY Bulls Losing Their Grip As Dojis Emerge Near 104.00

Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here

A narrow trading band and a pair of Dojis on the four hour chart is indicative of indecision amongst traders. This suggests awaiting a more constructive set of signals before entering new positions may be prudent.

USD/JPY: Dojis Indicate Indecision As Trading Band Emerges

USD/JPY Bulls Losing Their Grip As Dojis Emerge Near 104.00

Four Hour Chart - Created Using FXCM Marketscope 2.0,Volume Indicator Available Here

By David de Ferranti, Currency Analyst, DailyFX

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