Interesting P.A forming on USD/JPY suggesting 111 is vulnerable
USD/JPY:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Since kicking off 2017, USD/JPY has been busy carving out a descending triangle pattern (118.66/104.62). February had price elbow a touch outside the upper boundary of the aforementioned descending triangle to 112.22, though retreated lower and produced a shooting star pattern into the month’s end.
March breached the lower edge of the descending triangle, yet has recovered in strong fashion, leaving nearby demand at 96.41/100.81 unchallenged. Note current action is seen mildly fading the descending triangle’s upper boundary.
Daily timeframe:
Partially altered from previous analysis -
Shaped in the form of a near-full-bodied bullish candle last Thursday, a critical demand-turned supply at 110.10/109.52 was rattled and retested Friday, perhaps providing a basis for an approach to supply coming in at 112.64/112.10, an area that’s held price action lower on three occasions since March 2019.
Candlestick traders will note this week’s price action is visibly holding off 110.10/109.52, though follow through is proving difficult.
H4 timeframe:
Price action on the H4 timeframe has been compressing within the walls of an ascending channel formation between 101.18/105.91 since mid-March. On top of this, we’ve also recently seen the candles carve out an ascending triangle formation (black lines 111.47/109.33), stationed just south of a 161.8% Fib ext. level at 111.87.
Ascending triangles are typically viewed as continuation patterns, though breakouts to the downside also occur. It is, therefore, worth noting channel support and demand at 109.31/109.56, should a push lower materialise.
H1 timeframe:
USD/JPY saw highs around 111.60 before remaining just off peaks heading into Asia Pac trade. The pair largely followed moves in US equities which saw hefty rebounds from the prior day’s steep losses.
H1 structure appears to be welcoming an approach to 111, with a successful retest of this number potentially setting the stage for a run to yesterday’s session highs, followed by 112. A violation of 111, on the other hand, could weigh towards the 100-period SMA, circulating around 110.36.
Structures of Interest:
A successful retest at 111 is unlikely, given we’re coming off monthly structure and fading the top edge of a H4 ascending triangle. This is despite room seen to move higher on the daily timeframe.
As a result, moves back into the H4 ascending triangle could be seen, with a break of 111 possible towards the 100-period SMA. Intraday sellers south of 111, therefore, may be busy today.
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Since kicking off 2017, USD/JPY has been busy carving out a descending triangle pattern (118.66/104.62). February had price elbow a touch outside the upper boundary of the aforementioned descending triangle to 112.22, though retreated lower and produced a shooting star pattern into the month’s end.
March breached the lower edge of the descending triangle, yet has recovered in strong fashion, leaving nearby demand at 96.41/100.81 unchallenged. Note current action is seen mildly fading the descending triangle’s upper boundary.
Daily timeframe:
Partially altered from previous analysis -
Shaped in the form of a near-full-bodied bullish candle last Thursday, a critical demand-turned supply at 110.10/109.52 was rattled and retested Friday, perhaps providing a basis for an approach to supply coming in at 112.64/112.10, an area that’s held price action lower on three occasions since March 2019.
Candlestick traders will note this week’s price action is visibly holding off 110.10/109.52, though follow through is proving difficult.
H4 timeframe:
Price action on the H4 timeframe has been compressing within the walls of an ascending channel formation between 101.18/105.91 since mid-March. On top of this, we’ve also recently seen the candles carve out an ascending triangle formation (black lines 111.47/109.33), stationed just south of a 161.8% Fib ext. level at 111.87.
Ascending triangles are typically viewed as continuation patterns, though breakouts to the downside also occur. It is, therefore, worth noting channel support and demand at 109.31/109.56, should a push lower materialise.
H1 timeframe:
USD/JPY saw highs around 111.60 before remaining just off peaks heading into Asia Pac trade. The pair largely followed moves in US equities which saw hefty rebounds from the prior day’s steep losses.
H1 structure appears to be welcoming an approach to 111, with a successful retest of this number potentially setting the stage for a run to yesterday’s session highs, followed by 112. A violation of 111, on the other hand, could weigh towards the 100-period SMA, circulating around 110.36.
Structures of Interest:
A successful retest at 111 is unlikely, given we’re coming off monthly structure and fading the top edge of a H4 ascending triangle. This is despite room seen to move higher on the daily timeframe.
As a result, moves back into the H4 ascending triangle could be seen, with a break of 111 possible towards the 100-period SMA. Intraday sellers south of 111, therefore, may be busy today.