Upon retesting a key support level that was breached, the USD/JPY looks likely to turn lower.
Is a break-and-retest configuration in the works?
Let's examine the USD/JPY 4-hour time frame in more detail:
If you are confident that the US dollar will continue to weaken relative to the Japanese yen, you might want to consider the possibility of a decline in the USD/JPY from somewhat below 150.00.
In addition to being a psychological level, 150.00 is situated close to the 100 and 200 SMAs of the 4-hour chart, the support of the broken trend line, and the Pivot Point (150.20) level of the moment.
The fact that Stochastic is hanging out and moving lower from its "overbought" conditions is the icing on the cake for this potentially very profitable bearish setup.
The current USD/JPY values may lead to selling pressure, particularly if we observe
Selling pressure may increase if we witness a few more negative candlesticks in the next hours, given the current USD/JPY levels.
If the USD/JPY develops negative momentum, the S2 (147.49) Pivot Point line is a potential profit target to keep an eye on.
But what if the trend line, pivot point, and SMA resistance levels are all broken by the USD/JPY?
If your fundamental research indicates that the USD/JPY will continue to rise, you should think about purchasing as soon as the pair decisively breaks over the resistance level of 150.00.
In this scenario, profit-takers might target the previous highs of 151.85, but bulls in the USD/JPY could potentially generate enough buying pressure to create new monthly highs.
