Currently watching the markets live and my first indication of a USDJPY reversal is on the 20 and 65 period exponential moving average crossover.
The USDJPY pair is of particular interest as I am watching live for the next little while. This pair is particularly interesting at the moment as I am leaning towards having a bearish outlook.
This pair has been in an uptrend since July 10 of this year and crossed below the 65 period exponential moving average earlier this evening. Both the 65 and 20 period EMAs served as a dynamic resistance as price tested both these averages before continuing to sell off. The Yen appreciation is also partially due to foreign purchases of stock investment.
This is a significant foreign demand we have no seen for the past few weeks. Foreigners bought a record 444.6 billion Yen worth of shares this week driving up the currency’s value.
From a technical standpoint, I have positioned a conservative short position utilizing the two moving averages to monitor my exit position.