ICmarkets

USD/JPY: Technical outlook and review.

FX:USDJPY   U.S. Dollar/Japanese Yen
116 0 0
4hr TF.

The higher-timeframe picture resembles the following:
• Weekly timeframe: Price remains capped between the long-term weekly R/S flip level at 101.206, and the weekly supply area above at 105.432-104.065.
• Daily timeframe: The three spikes seen above the daily resistance level at 102.713 possibly consumed the majority of the sellers around this area, which likely cleared the path up to around daily supply at 104.104-103.802; however, price could see a sell off due to pro money liquidity requirements (not enough sellers to buy into) before this area gets hit. Two areas of demand where price could decline to have caught our eye, the first being a near-term daily S/D flip area at 101.962-102.257 which price is yet to hit, and the second, the dally demand area much lower at 100.747-100.967 before a stronger advance is seen, so do be prepared for this to possibly happen sometime soon.

Price action has made some new developments, before we discuss this though; a small snippet from the last analysis still remains very important and is crucial to remember:

Taking into consideration the bigger picture for a moment (at least on the daily timeframe ), a bearish reversal is expected before one can expect higher prices. Now, we can assume a lot of buyers got stopped out around the 4hr S/D flip area at 102.584-102.505 with their stops being set just below, but would these sell orders (stops from traders attempting to go long) be enough liquidity for pro money to buy into to push prices much higher? That is the big question, we believe doubtful, as price has not even touched the daily S/D flip area at 101.962-102.257 on the daily timeframe yet (see above on the daily timeframe analysis for details). With this in mind, we are seriously looking at the 4hr decision-point area lower down at 102.027-102.080 where the sharp burst of buying began, and as added confluence, this area is beautifully located around the daily S/D flip area just mentioned, so all in all, a fantastic area to keep an eye on.

Adding on to the above, price action is currently seen testing the minor 4hr S/R flip level at 102.714 once again. The approach price took to get there is interesting and could well be a clue we are in fact going to see lower prices soon. The small green trend line placed on the chart is to show how pro money have likely consumed demand as they were rallying price (take a look at those beautiful tails/spikes), thus possibly clearing the path south in the process for the sellers. So, if we see a nice bearish reaction at the aforementioned 4hr S/R flip level, we are expecting lower prices to around the 4hr decision-point area lower down at 102.027-102.080. However, we are not saying price will drop like a rock to this area, we of course do expect the usual road bumps on the way to our destination.

Pending/P.A confirmation orders:

• Pending buy orders (Green line) are seen just above the decision-point level (102.027-102.080) at 102.100. We have set a pending buy order here since this remains the place on this timeframe where pro money likely made the decision to push price up so aggressively, which indicates the strong possibility that unfilled buy orders may still be present and active here.
• No P.A confirmation buy orders (Red line) are seen in the current market environment.

• No pending sell orders (Green line) are seen in the current market environment.
• No P.A confirmation sell orders (Red line) are seen in the current market environment.

• Areas to watch for buy orders: P.O: 102.100 (SL: 101.971 TP: Dependent on price approach).P.A.C: No P.A confirmation buy orders are seen in the current market environment.

• Areas to watch for sell orders: P.O: No pending sell orders are seen in the current market environment. P.A.C: No P.A confirmation sell orders are seen in the current market environment.
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