ICmarkets

Interesting price action seen on the USD/JPY.

FX:USDJPY   U.S. Dollar/Japanese Yen
103 0 0
Weekly Timeframe: The weekly timeframe shows that the poor US data announced yesterday likely fuelled further selling out of a weekly supply area seen at 110.652-108.123. As a consequence, this move has brought price down to a weekly resistance flip level coming in at 105.432.

Daily Timeframe: For anyone who follows our analysis regularly, you may recall us mentioning that the daily decision-point demand area at 106.799-107.383 was consumed. Once the sellers were consumed here, this cleared the path south towards another daily decision-point demand area seen at 104.674-105.244. As we can see price did indeed drop like a rock towards the104.674-105.244 area, where at which point active buyers came into the market.

4hr Timeframe: So. Let’s recap here; price is now trading around a weekly resistance flip level (105.432), which could potentially break since price was aggressively sold from a major weekly supply area (110.652-108.123) only recently. The weekly resistance flip level is supported by a beautiful-looking daily decision-point demand area (104.674-105.244) which price has just reacted to. While on the 4hr timeframe we can see that price has hit a small 4hr decision-point demand area at 104.962-105.218 (located within the aforementioned daily decision-point demand area).

With this in mind, price rallied hard up to the 106 level where price is currently trading at. If price breaks above this level and reacts off of a small 4hr decision-point supply area coming in at 106.391-106.196, it is very likely further selling will be seen back down to at least the aforementioned 4hr decision-point demand area at 104.962-105.218, which will in turn obviously depict buying weakness out of the daily decision-point demand area (104.674-105.244).

On the other hand, assuming price breaks above the aforementioned small 4hr decision-point area at 106.391-106.196, this would likely attract further buying up to at least the 107 level, and thus depict buying strength from not only the daily decision-point demand area just mentioned, but also from the weekly resistance flip level at 105.432.

Buy/sell levels:

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

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

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