Looking for shorts on the USD/JPY...

FX:USDJPY   U.S. Dollar / Japanese Yen
172 0 6

Weekly gain/loss: - 157 pips
Weekly closing price: 103.09

Weekly view: After connecting with the underside of a resistance area drawn from 105.19-107.54 two weeks ago, the buyers, as you can see, took a backseat. Engulfing three prior weekly candles, last week’s run to the downside has, in our estimation, possibly set the stage for a continuation move south to support coming in at 100.61.

Daily view: However, before one places a sell order in this market, you may be interested to know that daily price recently checked in at a support level drawn from 102.63, which held firm going into the weekly close. As a result, our desk would prefer the aforementioned support level to be taken out before looking to short this market in line with weekly flow. A close below this barrier would, as far as we can see, open up the floodgates for prices to challenge the demand zone seen at 99.53-100.23, which happens to be located directly below the above said weekly support.

H4 view: Friday’s US job’s report had little effect on the pair’s movements. In fact, the unit spent the entire day restrained by a supply zone at 103.48-103.25 (bolstered by September’s quarterly open at 103.20) and a demand registered at 102.80-102.97.

Direction for the week: Until the daily support level at 102.63 is taken out, our team remains neutral. Once/if a close is seen beyond this structure, the market will likely slip lower throughout the week.

Direction for today: In that there’s very little noteworthy economic data set to hit the wire today, it’s possible that the pair may remain range bound between the above said H4supply and demand. Ideally though, we’re looking for a decisive close beyond the H4 demand.

Our suggestions: A decisive close beyond the current H4 demand would likely indicate that daily support at 102.63 is the next line on the hit list to be taken out. Therefore, a close below the H4 demand followed up with a retest and a reasonably sized H4 bear candle would, in our book, be considered sufficient enough to condone a short entry in this market, with an ultimate target set at 100.61: the weekly support. However, considering that US elections are set to take the spotlight tomorrow, you may find that technicals take a back seat during this time, so do trade carefully!

Data points to consider: There are no high-impacting events due for release on Monday.

Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: Watch for a close below the H4 demand at 102.80-102.97 and then look to trade any retest seen thereafter (H4 bearish close following the retest is required prior to entry – stop loss: ideally beyond the trigger candle).
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