USD/JPY: Technical outlook and review.

FX:USDJPY   U.S. Dollar / Japanese Yen
Weekly Timeframe: After seven consecutive weeks of relentless buying, the USD/JPY pair finally saw some selling interest last week from just below a weekly Quasimodo resistance level seen at 122.180. This move has consequently forced prices down towards a weekly swap area coming in at 117.931-116.799. This week shows that further selling is being seen at the moment, how long this will last is anyone’s guess, but with a jam-packed session of news today, this market will no doubt see some interesting movements. Let’s take a look on the lower timeframes to see what we can find.

Daily Timeframe: Active selling was seen all day yesterday pushing price into a small daily demand area at 117.225-117.873 (located within the aforementioned weekly swap area) making it the third time this area has been visited. Assuming that this area is consumed, we could potentially wave goodbye to the aforementioned weekly swap area, as this would likely attract further selling down towards a major daily swap level coming in at 115.503.

4hr Timeframe: For anyone who follows our analysis on a regular basis, you may recall us mentioning that we entered into a buy position late on Friday at 118.240; where we were unfortunately stopped out an hour or so after the open.

As already mentioned above, both the weekly and daily timeframes shows price is in demand at the moment, and as such, we are for the time being more biased to the long side. Here is what we see on the 4hr timeframe at the moment: price has recently sold off, pushing below 118; this could result in further selling down towards 117.344, a 4hr Quasimodo support level . Entering long around 117.368 is something we’d consider with lower-timeframe confirmation since the 118 level is looming just above like a big-black rain cloud. This is in our opinion the last line of defense for both the higher-timeframe demand areas (levels above). A close below here could potentially clear the path down to a 4hr demand area coming in at 116.326-116.784. We will be setting a pending buy order here around 116.844, as this area will likely see a bounce at the very least – reasons why can be seen on the chart.

Current buy/sell levels:

• Buy orders: 117.368 (Predicative stop-loss orders seen at: 117.153) 116.844 Predicative stop-loss orders seen at: 116.222).

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

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