ICmarkets

USD/JPY: Technical outlook and review.

FX:USDJPY   U.S. Dollar/Japanese Yen
121 0 3
Weekly Timeframe: The weekly timeframe shows that the USD/JPY             continues to rally after price broke above a major weekly supply area last week seen at 114.650-112.530. We feel that there is a good chance this rally will continue until price reaches a weekly supply area coming in at 117.931-116.799. It will be interesting to see what the lower timeframes show.

Daily Timeframe: The daily timeframe shows that the daily Quasimodo resistance area at 115.911-115.021 has seen a small break above. This is not a good sign for anyone short this pair at the moment, as it has potentially cleared the path north towards 117.120 (located within the weekly supply area mentioned above at 117.931-116.799), a daily Quasimodo resistance level. Let’s see what we can find on the 4hr timeframe.

4hr Timeframe: Price still remains range bound between 116/115. Considering that both the daily and weekly timeframes are indicating higher prices could potentially ensue, our bias is currently long on this pair. As far as buying is concerned though, we are a little cautious, since price could just as easily break below 115, and trade down towards a nice-looking combined 4hr demand/round-number area at 113.847-114.252/114, where potential buy orders are likely lurking just above at 114.340. Entering here using a pending buy order would not be a great idea in our humble opinion, since we would have no direction north. With that being said, if the right type of price-action formation is spotted on the lower timeframes here, taking a long here and targeting 115 as your first target could potentially work out.

However, in our opinion, for higher prices to be truly confirmed, a positive 4hr close above 116 would need to be seen. Following this, we would become very interested in joining the current uptrend on a positive retest of 116 as support, up to at least 117.120, the aforementioned daily Quasimodo resistance level.

Buy/sell levels:

• Buy orders: 114.340 (Predicative stop-loss orders seen at: 113.734).

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