Daily view: From the daily scale, we can see that a clear consolidation zone has been chiseled out within the aforementioned weekly demand area between daily support seen at 118.62 (located deep within the aforementioned weekly demand area), and a daily Quasimodo coming in at 120.35. The weekly close 119.76 has placed price in the middle of this range, so trading either long or short at this point would be low probability in our opinion. It will be interesting to see what the 4hr timeframe has to offer…
4hr view: Friday’s sessions saw the USD/JPY pair aggressively test the 120.00 handle, which, as we can all see, failed once price reached the 120.20 region. From this, we can also see a possible 4hr pattern forming. This is currently in the process of completing its C-D leg down to its reversal zone shaded in yellow at 118.93/118.66, and as far as we can see, the only thing standing in its way of completion is 119.50. Should we see a close below this number, price should be free flowing down to 119.00 seen just above the 4hr reversal zone, which comprises of the following numbers:
• 1.272 of AB.
• 0.786 of XA.
• AB-CD pattern.
• Round-number support 119.00 seen just above this zone.
• Converging 4hr from the low 115.84.
• Daily support (lower limit of daily range) coming in at 118.62. This is a very important aspect.
On the flip side, should the market decide it wants to go higher this week, we’ll be looking for 120.00 to be consumed, and price to touch base with the 4hr Quasimodo resistance line coming in at 120.27. This level, as you can probably see, is not only located very near the upper limit of the daily range 120.35 (see daily section), but also converges nicely with a 4hr down extended from the high 120.83, making it an awesome place to look for confirmed shorting opportunities if prices should trade this high. Targets would need to be kept sensible here, however, since let’s not forget that price is still hovering within weekly demand (see above) at the moment.
Levels to watch/ live orders:
• Buys: 119.00/118.62 (Predicative stop-loss orders seen at: dependent on where one confirms this area).
• Sells: 120.27/120.35 (Predicative stop-loss orders seen at: dependent on where one confirms this area).