as we can see here on the USD/JPY
chart that the market has been trending with upside momentum. previously the market was trending on top of a support trend line
, which the market had tested and bounced off a couple of times. however, after one of the last tests from the upsides and when it was going to test the trend line
, the market had a strong move down and broke past the support level
into new downside areas. now the market had tested the support and is not using it as resistance and created a new support area
at lower levels. the market is now having its second test on the resistance line. due to this type of pattern when the resistance was tested its momentum was broken and had a long wicked dogi candle above the resistance, to another strong bearish
candle to the downside. this means that the market has been rejected in that area and should be moving to go downwards. also due to all of the recent strong US news, the state of the dollar is uncertain, so when trading US pairs, take extra caution and risk management.