The risk markets had an incredible day today as equities(risk) took off. However, it is important to note that all JPY crosses are tied to risk sentiment. The USD/JPY pair is interesting at this moment because of the DXY moves and Risk moves. As such let's look at this pair and prepare for upcoming moves.
USD/JPY
As we look at the action, we see that risk is on upswing. Currently both our long-term and Short-term oscillators are sitting at neutral. This creates an interesting trade setup for the USD/JPY pair. We can see that it has recently moved up. However, it is going up against resistance in our short-term moving average, as well as a longer-term descending trend. As a result of the current uncertainties in the U.S. and the foregoing chart, we view this as a corrective move and believe this pair will continue in the downtrend. The RSI is bumping against 50 and looking to go lower, this implies that the next move in the pair is lower. A break above 106.00 invalidates our short thesis. In the meantime, we will be looking to go short up against the 105.50-106.00 points.
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