ICmarkets
Long

USD/JPY: Technical outlook – still bullish!

FX:USDJPY   U.S. Dollar/Japanese Yen
121 0 4
For those who read our previous report on the USD/JPY             you may recall us mentioning to watch for price to retest the 110 handle and look for a lower timeframe buy entry. There was confirmation seen on the M30 yesterday (tops around the 110.24 region were taken out which followed with a reversal to enter long around the 110 mark), which gave one a chance for a small profit or at worst a breakeven trade.

At the time of writing, the pair has found support around a small H4 demand coming in at 109.58-109.83. Usually we would not consider this area but seeing as how it was a zone formed from the break of the 17th May high 109.65 (red arrow), it does hold some worth in our book. What is more, daily price is also seen retesting daily demand from 109.26-109.83 which shows room to continue north up to 110.96 – a daily resistance line. Furthermore, let’s not forget that weekly buyers continue to push this market higher from weekly demand at 105.19-107.54, likely en-route to weekly supply coming in at 113.80-111.59.

Our suggestions: In light of the above points we still feel this pair wants higher prices. Keep an eye out for a break above and retest of the 110 handle to buy, targeting the 111.00/110.84 area today (formed by a H4 resistance at 110.84, a daily resistance at 110.96 and the 111.00 resistance handle). Again though, we would recommend waiting for a lower timeframe buy setup to form following the retest of 110. A break/retest of supply, a trendline break/retest or simply a cluster of buying tails around the 110 region would be sufficient enough for us. Stops are usually placed 5-10 pips beyond confirming structures.

Levels to watch/live orders:

• Buys: Watch for price to close above 110 and look to trade any retest seen thereafter (lower timeframe confirmation required).
• Sells: Flat (Stop loss: N/A).
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