FxWirePro: USD/JPY forms shooting star despite gap up, bulls attempts to breach 21-DMA, major trend still weaker – Speculative bets on binaries but use short hedge

Shooting star has appeared on USDJPY despite the gap up opening yesterday, price behavior drifting in the sloping channel (refer daily chart) if the prevailing attempts of upswings sustain decisively more rallies seem to be likely; however, the confirmation from momentum indicators is needed.

From the last couple of days, the pair dropped vigorously from the highs of 115.505 levels to the recent lows of 108.133 levels, the flurry of bearish streaks occurred especially after shooting star at peaks of the uptrend that indicates weakness (at channel resistance).

The current prices on this timeframe have spiked well above DMAs, for now, it is unwise to expect sharp rallies neither a steep slump as the major trend still seems to be weaker, and it is better to devise trading plans that favor interim bulls

In contrast, the bears have managed to break below major supports at 112.575 & EMAs, No traces of bullish indication as current prices slid below EMAs again.

RSI signals losing strength in previous buying interests as it converges to the mild sideways to downswings, while Stochastic has been indecisive but momentum in buying sentiments has been absolutely shrunk away (refer monthly charts).

While MACD remaining in the bearish trajectory has signaled indecisiveness in both major and minor trends.

Trading tips:

We reckon it wise to capture deceptive dips and stay long, as a result of above technical reasoning we see opportunity in binary calls that seem more conducive for intraday speculators.

This strategy is best suitable for leveraging effects if you are the conviction on upside targets.

Alternatively, we advocate shorting futures contract of mid-month tenors on hedging grounds for the risks of southward journey upto 108 levels.

Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.