USDJPY was on the uptrend from the Asian opening up to London opening. Than it was a sharp reversal downtrend that takeaway all the gains it garnered during the Asian session within two hours of trading in London session. It recovered to the 38.2% retracement but there is a indication of market weakness as the downward sloping 60 ema contained price uptrend. USDJPY was ranging at a tight range of 20 pips for the first two hours of US session.
By 15:00 GMT or 10.00 am New York time, there was a report on US consumer confidence that dipped further in January, falling to a new low at 37.7 from 38.6 in December. The report caused a weakness in some major currency crosses but a few of the traders attributed the weakness to a large EURJPY selling. The fall in EURJPY set the ball rolling to the downside just after the 15:00 GMT options expiry. Some surmise the selling was from model funds as many models reset daily at 15:00 GMT, a period of maximum market liquidity under normal circumstances.
USDJPY fall was supported to a level of 88.52 (horizontal red line). A morning star candle is formed outside the Bollinger Band (BB). The oversold is also reflected by RSI level below 30. One hour after the New York open i.e. 14:00 GMT I decided to enter the market with a bias on the upside since the 15 min sharp fall is just a temporary jerk downward and a reversal upward to at least the daily pivot point-89.00 is overdue. I took two long entries at 15:51 and 16:44 GMT.
1 min chart of USDJPY
15 min chart of USDJPY
15 min chart of USDJPY
