ICmarkets

USD/JPY A push lower is what we want to see!

FX:USDJPY   U.S. Dollar/Japanese Yen
81 0 2
4hr TF.

The higher-timeframe picture resembles the following:

• The weekly chart shows buying pressure is being seen from the long-term weekly support at 101.206, a positive close below this level has yet to be seen.

• Buyers and sellers have been seen trading within a medium-term range now for about two months (Resistance: 102.713 Demand: 100.747-100.967). If we see a positive close below the aforementioned daily demand area, is this the end for the buyers? Not quite. A break below would likely see price trading down to daily demand at 99.562-100.247 where active buyers are quite possibly lurking. What would this look like on the weekly timeframe if we did indeed see a reaction at daily demand (99.562-100.247)? Our guess is it would look like a carefully planned fakeout, which would no doubt give pro money lots of liquidity in the process..

For most of the week (at the time of writing) the buyers have been in control, with very little interest being seen by the sellers, not even at the 4hr D/S flip area at 101.400-101.465. We can safely assume most of the sellers have been consumed at this area now; price is likely free to rally higher up to at least the 4hr decision-point level at 101.754 where active sellers are quite possibly waiting.

However, if pro money does not have enough sell orders to buy into, what will they likely do? We believe they will sell, and sell hard, why do we believe this? Lots of traders will see the selling momentum and jump on board, not paying attention to the higher timeframes thus effectively giving their orders to pro money. There will also no doubt be buyers trying to play the retest above the 4hr D/S flip area (levels above) with their stops just below, these stops will turn into sell orders once price slams into them, thus giving more liquidity to the big guys. Where will they likely stop selling? Our guess is at the 4hr decision point below at 101.187-101.276. This area remains important as this is where (on this timeframe) pro money buyers made the decision to push prices up above the D/S flip area at 101.400-101.465.

Pending/P.A confirmation orders:

• The pending buy order (Green line) set just above the round number 101.000 at 101.020 has been removed; price for the time being has rallied too far from the entry level.
• New pending buy orders (Green line) are seen just above the decision-point area (101.187-101.276) at 101.292. The reason a pending buy order has been set here is because this remains an important area as this is the likely where pro money buyers made the ‘decision’ to push prices higher above the D/S flip area at 101.400-101.465, making this zone a magnet for a first-time reaction.
• No P.A confirmation buy orders (Red line) are seen in the current market environment.


• Pending sell orders (Green line) are seen just below supply (103.294-102.983) at 102.953. A pending sell order was set here due to this being an area where likely unfilled sell orders are.
• P.A confirmation sell orders (Red line) are seen just below supply (102-191-102.104) at 102.074. A P.A confirmation sell order was used here purely for the simple fact we are trading around a higher-timeframe weekly support level at 101.206 meaning we may see a small reaction, but nothing to write home about, hence the need for confirmation!
• New P.A confirmation sell orders (Red line) are seen just below the decision-point level (101.754) at 101.733. We have not chosen a pending sell order here for the simple reason, price could very well ignore this area, and continue on higher due to the amount of touches this level has seen in the past.


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