Talking Points
- The USD/JPY is trading back under resistance at 117.64
- SSI reads an extreme +2.23
- Bearish breakouts begin under 116.32
(Created using Trading View Charts)
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The USD/JPY is settling back down below resistance, after failing to breakout during Monday’s open. Current resistance is found at today’s R3 Camarilla pivot, which is found at a price of 117.64. If prices remain below this point, it suggests that prices may return to support. Today’s pivot range measures, 89 pips and places support at 116.75. It should be noted that prices have already tested support once this morning. If prices reach this point again, range traders may again look for prices to trade back towards resistance.
Traders looking for a breakout should continue to monitor today’s R4 and S4 pivot points. A move through the R4 pivot, which is depicted above at a price of 118.09, would suggest a return to the bullish momentum seen earlier in today’s trading session. Conversely, a move below the S4 pivot at 116.31 would suggest a turn in direction back towards the USD/JPY’s primary trend. In this scenario, traders may extrapolate 1-X extension of today’s range to find potential targets near 115.42
SSI ( Speculative Sentiment Index ) for the USD/JPY has already started the week at an extreme. The index is currently reading at +2.23. With more positions long than short, this contrarian indicator points towards the potential for further USD/JPY weakness this week. In the event of a reversal or further consolidation for the pair, traders will look for this index to pull back from extremes to a more neutral value.
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