USD/JPY: is showing the pair is at a critical juncture

FX:USDJPY   U.S. Dollar / Japanese Yen
Weekly Timeframe: The weekly timeframe is currently showing selling activity just below a major weekly Quasimodo resistance level seen at 112.180. Let’s take a look on the lower timeframes to see what we can find.

Daily Timeframe: Friday’s NFP madness saw the USD rally a little fewer than 200 pips up to a daily supply area coming in at 122.610-121.540 (encapsulates the aforementioned weekly Quasimodo resistance level ). This area seems to have attracted sellers into the market yesterday. We see very little support stopping prices from declining down to at least a small daily decision-point demand area at 119.327-119.778.

4hr Timeframe: The recent developments on the 4hr timeframe show that ever since the market opened at 121.576, the sellers have been in control. Price is currently seen edging closer towards a 4hr decision-point demand area at 120.071-120.366. This area holds extra significance to us since this is where NFP buying likely took place; therefore there may be unfilled buy orders left there.

We intend to trade this market as follows:

• Watch for lower-timeframe buying confirmation (tentative buy orders seen just above at 120.435) around the aforementioned 4hr decision-point demand area. Nonetheless, we will be extra cautious due to price currently trading around higher-timeframe supply (see above) at the moment.

• In the event that this 4hr decision-point demand area is consumed, we will then begin looking for shorting opportunities targeting a 4hr demand area seen at 119.116-119.323.

Buy/sell levels:

• Buy orders: 120.435 (Predicative stop-loss orders seen at: 119.937).

• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

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