TradeCityPro | USD/JPY : Divergence and Trend Weakness

👋 Welcome to TradeCityPro!
In this analysis, I’ll review the USD/JPY forex pair, focusing on the 4-hour timeframe.

⏳ 4-Hour Timeframe: Current Trend Insights
At present, the trend in the 4-hour timeframe is upward, with an observable ascending trendline. The SMA99 has also acted as a support level.

🔽 However, the strength of the trend appears to be diminishing. The bullish candles are progressively smaller, and corrections have become deeper.

✨ RSI Analysis and Momentum
A negative divergence is noticeable in the RSI, indicating a weakening trend. The 39.98 support level is crucial, and with the divergence and trend weakening, the likelihood of breaking this RSI level is high. If this happens, the market’s bullish momentum will fade.

📉 Short Position Strategy
If the trendline is broken and the 153.639 trigger level is breached, followed by price stabilization below this level, it will signal an entry opportunity for a short position. The specific trigger, whether based on Dow Theory, a pullback to 153.639, or another strategy, depends on your approach.

📊 The next key support is at 151.512. If you missed or avoided the 153.639 trigger due to risk concerns, breaking this support could provide a safer short entry point. Subsequent supports are located at 149.177 and 145.826.

📈 Long Position Strategy
Despite the weakening trend, the 156.544 trigger is still a valid entry point for long positions. The next resistance after this level will be at 157.702.

🔑 By keeping an eye on these levels and market momentum, you can effectively align your trading strategy with market conditions.

📝 Final Thoughts

This analysis reflects our opinions and is not financial advice.

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