Despite the Bank of Japan (BOJ) intervention, there doesn’t seem to be enough bullish sentiment to reverse the downtrend on the daily chart. On the other side of that coin, the bears certainly are not putting the pressure on the USD/JPY in a way that is pushing the the pair back into its former downtrend either. The stall comes from a lack of bullishness in a pair that is still reflecting the fact that there is still strength in the yen itself but the fear that the BOJ could act again and push the USD/JPY through 86.00.
The initial area to watch for selling pressure seems to be 86.00 and this may become a near term “line in the sand” for short sellers who are willing to remain bearish as long as support is not established above this major psychological level.
There is an intraday double top that should be watched on the 240-minute chart.
If this level holds, there is a chance that the daily chart will complete a transition into distribution but not necessarily resume the downtrend since it appears that (at least for the near term) there is still some concern – for the yen bulls – that the BOJ could intervene again.
Check out my friend and new trader, Mark O’s blog on trading here. It follows much of my trading approach.