Daily Timeframe: It was mentioned in the previous analysis that in order for the USD/JPY pair to continue rallying, a daily supply area seen at 119.196-118.041 would need to be consumed. Recent developments show that price has pushed above this area by a few pips. This move may have consumed some of the selling pressure here, and could in fact be all the buyers to push prices higher towards a daily supply area coming in at 122.610-121.540 (encapsulates the aforementioned weekly Quasimodo ).
4hr Timeframe: The 4hr supply area seen at 118.966-118.458 has (as far as we can see) been well and truly consumed, as reported may happen in the previous analysis.
The recent moves seen on this pair has likely cleared the path north for prices to at least challenge the huge psychological level 120, and given enough time, maybe the 4hr supply area as well seen above it at 120.992-120.668. The reason we believe prices could move so high is because of the (possible) consumed supply/sell orders seen to the left marked with a pink , check out the supply consumption wicks seen at 118.966/119.046/119.546.
The above is all well and good, but the real question we all need an answer to is how do we trade this prospective move? We see two possible areas from where one could enter long from. The first is seen around the 118.073 mark, just above the round-number level 118. Lower-timeframe confirmation will be required here before pulling the trigger as we so no logical area for a stop-loss order. The second is seen lower down at 117.378, a little above the 4hr decision-point demand area at 116.807-117.304. We are relatively comfortable setting a pending buy order here, but remain aware of the fact that some resistance may be seen around 118 before prices continue north.
Targets for each trade will be set around 120, and 120.594.
Current buy/sell levels:
• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: 118.073 (Predicative stop-loss orders seen at: Dependent on where one confirms the level) 117.378 (Predicative stop-loss orders seen at: 116.715)