ICmarkets

USD/JPY: Technical outlook and review.

FX:USDJPY   U.S. Dollar/Japanese Yen
85 0 0
4hr TF

The higher-timeframe picture resembles the following:

• Weekly TF: Current trading action is taking place just above a weekly R/S flip level at 101.206, if buying is seen here; the first trouble area we see is around the weekly supply area above at 105.432-104.065.

• Daily TF: 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. The area of daily demand below at 100.747-100.967 has caught our eye, which is beautifully located just under the weekly R/S flip level (levels above). This daily demand area could help facilitate a nice fakeout of the weekly R/S flip level that will no doubt stop millions of traders out in the process, giving pro money the liquidity they require for higher prices up to daily supply at 104.104-103.802.

Current trading action is seen around the 4hr decision-point area at 102.430-102.230. Selling pressure is not exactly convincing here at the moment, and this should come as no surprise to anyone who follows the higher timeframes. Look at where we are currently located on the weekly chart; price is trading around a heavy-weight weekly R/S flip level at 101.206. So, taking this into consideration we believe a break above here is likely; however we are also prepared for a decline down to around the round number 102 beforehand. If a break above does happen, we see very little stopping price from hitting the 4hr decision-point level at 102.922, but for the time being price remains capped between the 4hr decision-point area at 102.430-102.230 and the round number 102 below.

Pending/P.A confirmation orders:

• Pending buy orders (Green line) are seen just above the 4hr demand area (101.187-101.276) at 101.282. A pending buy order has been placed here simply because we are trading relatively close to daily demand at 100.747-100.967 and also this 4hr area remains fresh and untouched for the time being.
• Pending buy orders (Green line) are seen just above the 4hr demand area (101.306-101.365) at 101.375. A pending buy order has been placed here simply because we are trading relatively close to daily demand at 100.747-100.967 and also this 4hr area remains fresh and untouched for the time being.
• New P.A confirmation buy orders (Red line) are seen just above the round number 102 at 102.027. The reason behind setting a P.A confirmation buy order here, and not a pending buy order is simply because as explained many times over, these round number levels are sometimes subject to deep test/spikes, which consequently stops out countless traders, we do not want to be one of them, hence the need for confirmation here.

• No pending sell orders (Green line) are seen in the current market environment.
• P.A confirmation sell orders (Red line) are seen just below a 4hr decision-point level (102.922) at 102.900. The reason for setting a P.A confirmation sell order here is simply because price has already tested this area, meaning that supply could have already been consumed, hence the need to wait for confirmation.

• Areas to watch for buy orders: P.O: 101.282 (SL: 101.158 TP: Dependent on price approach) 101.375 (SL: 101.158 TP: Dependent on price approach). P.A.C: 102.027 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).

• Areas to watch for sell orders: P.O: No pending sell orders are seen in the current market environment. P.A.C: 102.900 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).

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