Daily Timeframe: The recent buying momentum seen from daily demand coming in at 115.55-116.38 (seen just above the aforementioned major weekly swap level) has managed to break above a minor daily swap area seen at 117.22-117.64. This move has potentially cleared the path north for further buying towards a daily supply area at 119.95-119.14. It will be interesting to see what the 4hr timeframe has to say about this.
4hr Timeframe: The 4hr timeframe reveals that the USD/JPY pair sold off yesterday at the open (117.43), but consequently found 117.00 to be supportive enough to allow the buyers back into play. As such, this attracted further buying into the market which pushed prices north towards a 4hr supply area visible at 117.93-117.69.
With both the weekly and daily timeframes showing support in the market, our bias for the time being is long. However, buying into the current 4hr supply area is something we’re not willing to do no matter how good the higher-timeframe picture looks. A close above this 4hr supply and preferably 118.00 would be our signal to begin looking for buying opportunities on the (possible) retest of 118.00. Selling on the other hand is risky considering the higher-timeframe strength that is being seen, but not out of the question. A break below the 117.41 low on the 30 minute timeframe would likely confirm that a short-term move down to 117.00 may well be in store.
So, with the above in mind, buying is not permitted for the time being, and selling will only be considered if prices break the 117.41 low on the 30 minute timeframe.
Current buy/sell levels:
• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).