USD/JPY is trading at 110.75 and inside of the corrective structure (bearish flag), which is a sign that buying looks risky. Since there is impulsive downward movement in the background, we expect downward continuation in the next period.
USD/JPY did a successful breakout of the rising upward trendline in the background, which is a sign of weakness. We found a hidden bearish divergence on the Stochastic oscillator, which is another sign of weakness. Key short-term resistance is set at 111.13 while the key support short-term support is set at 11.28.
Trading recommendation: We sold aggressively USD/JPY (small position) from 110.77 and we placed protective stop at 111.15. We plan to add another position if we see a breakout of the bearish flag (110.47). Downward targets are set at 110.28 and 109.60.
