FX.co ★ USD/JPY technical analysis and trading recommendations for May, 18

4-hour timeframe

The overall picture:

After a confident movement came the sideward channel. But we have a sell signal with the target 91,26. The signal has been confirmed by Chinkou-Span strengthening below the chart, not by the price fixation below Ishimoku cloud. We can also see that now the sideward channel is possible which signaled by the Bollinger bands. So in case the current signal and its force remain after the Bollinger bands expansion to the downside the pair can be sold with the first target 91,57 (the first support level). In case the fixation is below this level the next target will be the support level at 90,68. The Bollinger bands shows a sideward movement – the lines do not go advanced and down-directed that testifies about possible flat in near time. MACD is improving demonstrating an upside trend.

Trading recommendations:

In the present situation it is recommended to wait for the Bollinger bands expansion downwards and MACD outbreak, after that short positions should be opened with the target at 91,57 and further to 90,68. Stop Loss should be put above 92,70.

The chart annotation:
Ishimoku indicator:
Tenkan-sen — red line
Kijun-Sen — blue line
Senkou Span A — light brown stipple line
Senkou Span B — light purple stipple line
Chinkou Span — green line
Bollinger Bands indicator:
3 yellow lines
MACD indicator:
The red line and the histogram with the white bars in the indicators window.