ICmarkets

USD/JPY: Technical outlook and review.

FX:USDJPY   U.S. Dollar/Japanese Yen
173 0 2
Weekly Timeframe: Further buying is indeed being seen on the USD/JPY             pair. This comes after price positively closing above a major weekly supply area at 117.931-116.799 last week. Does this mean we could be seeing further buying up to a weekly Quasimodo resistance level seen at 122.180 in the near future? Let’s take a look on the lower timeframes to see how price is structured.

Daily Timeframe: Yesterday saw the market print a daily indecision candle just above a daily supply area at 119.820-118.700. We can be relatively confident that most of the sellers’ buy stops have been taken out, and as such, we feel there’s a good chance follow-through buying may be seen up to a daily supply area coming in at 122.610-121.540, which beautifully surrounds the aforementioned weekly Quasimodo resistance level .

4hr Timeframe: It was mentioned in the previous analysis that the 4hr demand area at 119.116-119.323 could provide a nice base in which to enter long from. As it turns out it was. The reaction was nearly to-the-pip. Unfortunately, we were not involved in this move as we decided to wait for lower-timeframe price action, since we believed a fakeout was likely going to be seen.

All is not lost though, with the NFP announcement due later today, we could potentially get another shot at entering long around the 4hr demand area. We will however be once again requiring confirmation from the lower timeframes, since the volatility that’s expected could indeed force prices to fakeout lower. Assuming that we manage to enter long sometime during today’s sessions, we intend to ride this baby north at least until the daily supply area mentioned above at 122.610-121.540.

Buy/sell levels:

• Buy orders: 119.361 (Predicative stop-loss orders seen at: 118.935).

• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

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