Shortly after Yellen’s testimony in Congress yesterday, the USD/JPY
continued on its upwardly path, taking out H4 supply at 109.70-109.45 and closing the day marginally above the 110.00 handle. While yesterday’s close is considered a bullish
cue, we still have to take in account what’s occurring over in the bigger picture. Weekly price recently crossed swords with a strong-looking supply zone
drawn from 111.44-110.10 that may challenge the current bull run. Down on the daily chart
on the other hand, the candles are seen hovering just ahead of a Quasimodo resistance level
fixed at 110.58 that is housed within the walls of the above said weekly supply.
Our suggestions: Ultimately, our desk has their eye on the above noted daily Quasimodo resistance level
for shorts today. Therefore, we’re essentially looking for the 110 handle to hold firm this morning, which should encourage further buying as we enter into the more liquid sessions later on.
A pending sell order has been placed at 110.56, with a stop set above the H4 supply that corresponds with the daily Quasimodo level (110.83-110.57) at 110.85.
Data points to consider: FOMC member Bullard speaks at 10.30am, followed by two other members taking the stage (Dudley/George) at 2.30pm GMT