111 likely to give way according to our technicals...
Weekly gain/loss: + 300 pips
Weekly closing price: 110.83
After clipping the top edge of a weekly support area at 105.19-107.54, USD/JPY bulls staged an aggressive recovery last week, completely engulfing the prior week’s losses. Although the USDX formed a bearish pin bar from weekly resistance at 11854 last week, the path north on the USD/JPY appears reasonably free up to as far as the weekly supply area punched in at 115.50-113.85.
Daily resistance at 110.76, as you can see, suffered a rather brutal blow on Friday as price struck highs of 111.32. While a marginal close was printed above this line, it is very difficult to judge whether this is enough to spark further buying on this scale up to resistance planted at 111.91/61.8% daily Fib resistance at 111.77.
A quick recap of Friday’s movement on the H4 timeframe shows price failed to sustain gains beyond the 111 handle, largely influenced by lower-than-expected US Retail sales. Although the move generated seller interest, there wasn’t much follow-through action seen. This was, as far as we can see, due to the US consumer sentiment index measured by Reuters/Michigan coming in a 95.3 against an expected reading of 95.1.
Suggestions: The H4 selling wicks chalked in around 111 have likely stirred candlestick traders – but we would advise treading carefully here! Both weekly and daily price suggest that further upside may be on the horizon. Therefore, we have absolutely no plans to sell this market anytime soon. In fact, similar to the GBP analysis, we will be watching for the H4 candles to run above 111 and hold firm as support. Should this occur and price prints a full, or near-full-bodied bull candle following the retest, we would look to long this market up to the 111.80ish area (see daily resistances noted above).
Data points to consider: Japanese banks will be closed in observance of Respect-for-the-Aged Day. No US events on the docket today.
Levels to watch/live orders:
• Buys: Watch for H4 price to engulf 111 and then look to trade any retest seen thereafter (waiting for a H4 confirming bull candle to form following the retest is advised, stop loss: ideally beyond the candle’s tail).
• Sells: Flat (stop loss: N/A).
Weekly closing price: 110.83
After clipping the top edge of a weekly support area at 105.19-107.54, USD/JPY bulls staged an aggressive recovery last week, completely engulfing the prior week’s losses. Although the USDX formed a bearish pin bar from weekly resistance at 11854 last week, the path north on the USD/JPY appears reasonably free up to as far as the weekly supply area punched in at 115.50-113.85.
Daily resistance at 110.76, as you can see, suffered a rather brutal blow on Friday as price struck highs of 111.32. While a marginal close was printed above this line, it is very difficult to judge whether this is enough to spark further buying on this scale up to resistance planted at 111.91/61.8% daily Fib resistance at 111.77.
A quick recap of Friday’s movement on the H4 timeframe shows price failed to sustain gains beyond the 111 handle, largely influenced by lower-than-expected US Retail sales. Although the move generated seller interest, there wasn’t much follow-through action seen. This was, as far as we can see, due to the US consumer sentiment index measured by Reuters/Michigan coming in a 95.3 against an expected reading of 95.1.
Suggestions: The H4 selling wicks chalked in around 111 have likely stirred candlestick traders – but we would advise treading carefully here! Both weekly and daily price suggest that further upside may be on the horizon. Therefore, we have absolutely no plans to sell this market anytime soon. In fact, similar to the GBP analysis, we will be watching for the H4 candles to run above 111 and hold firm as support. Should this occur and price prints a full, or near-full-bodied bull candle following the retest, we would look to long this market up to the 111.80ish area (see daily resistances noted above).
Data points to consider: Japanese banks will be closed in observance of Respect-for-the-Aged Day. No US events on the docket today.
Levels to watch/live orders:
• Buys: Watch for H4 price to engulf 111 and then look to trade any retest seen thereafter (waiting for a H4 confirming bull candle to form following the retest is advised, stop loss: ideally beyond the candle’s tail).
• Sells: Flat (stop loss: N/A).
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