In recent sessions, we can see that the USD/JPY couple closed above the 103 handle during the early hours of London trading. A few hours later, going into US trading, the break above 103 was further bolstered by hotter than expected US ISM non-manufacturing PMI data, consequently pushing the pair up to a fresh H4 supply zone coming in at 103.80-103.62.
With a H4 bearish selling wick recently printed off this zone, and the fact that this supply is smothered by a daily resistance area drawn from 103.50-103.89, this is an interesting barrier for shorts. Our only concern is, of course, the weekly chart, which, other than the 29/08 high 104.32, there’s little stopping prices from pushing north and challenging the resistance area at 105.19-107.54. On top of this, there is also a chance that price may fake though this area to cross swords with the 104 boundary.
Our suggestions: Despite the drawbacks, we feel a short from the current H4 supply is worth the risk. As such, our team entered short at 103.58, with our stop loss placed above the daily resistance area at 103.92, targeting 103 as our immediate take-profit zone. For anyone who’s taken this trade alongside us, remain aware that we have the US Jobless claims scheduled for release at 12.30pm GMT later on today.
With a H4 bearish selling wick recently printed off this zone, and the fact that this supply is smothered by a daily resistance area drawn from 103.50-103.89, this is an interesting barrier for shorts. Our only concern is, of course, the weekly chart, which, other than the 29/08 high 104.32, there’s little stopping prices from pushing north and challenging the resistance area at 105.19-107.54. On top of this, there is also a chance that price may fake though this area to cross swords with the 104 boundary.
Our suggestions: Despite the drawbacks, we feel a short from the current H4 supply is worth the risk. As such, our team entered short at 103.58, with our stop loss placed above the daily resistance area at 103.92, targeting 103 as our immediate take-profit zone. For anyone who’s taken this trade alongside us, remain aware that we have the US Jobless claims scheduled for release at 12.30pm GMT later on today.
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