USD/JPY has formed a nice uptrend last week and it seems like it is continuing with the same idea in mind this week. The 50 SMA (yellow) has defined the trend. The 50 SMA was providing resistance before the uptrend started early last week. Now, it has turned into solid support.
The 50 SMA has been pushing this pair higher and this morning USD/JPY and the 50 SMA met again. The moving average did its job again providing support, but we wanted another confirmation before going long.
The confirmation came from stochastic and the candlestick pattern. The stochastic just became oversold, which implies that the pullback is complete. Besides that, the previous H1 candlestick closed as a hammer which is a reversing signal. The price was pulling back lower earlier his morning, so the reverse was supposed to be bullish, which is already underway.
The 50 SMA has been pushing this pair higher and this morning USD/JPY and the 50 SMA met again. The moving average did its job again providing support, but we wanted another confirmation before going long.
The confirmation came from stochastic and the candlestick pattern. The stochastic just became oversold, which implies that the pullback is complete. Besides that, the previous H1 candlestick closed as a hammer which is a reversing signal. The price was pulling back lower earlier his morning, so the reverse was supposed to be bullish, which is already underway.