USD/JPY: Technical outlook and review.

FX:USDJPY   U.S. Dollar / Japanese Yen
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4hr TF.

The higher-timeframe picture resembles the following:

Weekly TF: Serious buying has pushed price very deep within a weekly supply area at 105.432-104.065, with only a little interest being seen by the sellers at the moment, a break above here could likely trigger buying interest up to around the weekly supply area at 110.652-108.123.

Daily TF: A reaction around the daily supply area at 106.946-105.083 has been seen, could this be enough to bring prices down to at least the daily demand area at 103.544-103.911??


On the 4hr timeframe, the bearish reaction (105.301) is likely the cause of unfilled sell orders sitting around the lower base of the daily supply area just mentioned above. The retest of the round number level as support at 105 failed in great fashion, with price seen breaking below, and then a candle later (105.114) retesting it as resistance!

If the move above the aforementioned round number was a fakeout to collect liquidity (buy orders in this case), this would make sense, since we are still trading around higher timeframe supply areas at the moment (Weekly: 105.432-104.065, Daily: 106.946-105.083), and since the path south appears clear of any obvious 4hr demand, a move down to the 4hr R/S flip level at 104.264 could be seen.

For us, we have to play on the side of caution here, we have allocated a P.A confirmation sell level just below the round number 105 at 104.957, this will give us the chance to judge if real selling pressure has entered the market or not.

Pending/P.A confirmation levels:

• No pending buy orders (Green line) are seen in the current market environment.
• The P.A confirmation buy level (Red line) set just above the round number 105 at 105.028 has been removed since price traded too far below the entry level, making this trade invalid for the time being.

• No pending sell orders (Green line) are seen in the current market environment.
• New P.A confirmation sell levels (Red line) are seen just below the round number 105 at 104.957. The reason a pending sell order was not allocated here was simply because round numbers tend to be a magnet for deep tests, and also this round number has already seen a minor test already at 105.114, hence the need for confirmation on this one!

• Areas to watch for buy orders: P.O: No pending buy orders are seen in the current market environment. . P.A.C: No P.A confirmation buy levels are seen in the current market environment.

• Areas to watch for sell orders: P.O: No pending sell orders are seen in the current market environment. P.A.C: 104.957 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).
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