USD/JPY: Technical outlook and review...

FX:USDJPY   U.S. Dollar/Japanese Yen
139 0 3
For those who read our previous report on the USD/JPY             http://blog.icmarkets.com/thursday-20th-august-daily-technical-outlook-and-review/ you may recall that we mentioned to watch for lower timeframe selling confirmation in between 123.81/124.00. As you can see, price responded beautifully to 124.00 with two clear selling wicks. It was after the close of the second candle (123.92) that we decided to enter short at market. Shortly after price dropped like a rock and is at the time of writing close to hitting 123.25 – our take-profit level just above the 4hr demand area at 123.00-123.23.

In that price is now trading just above a 4hr demand area at the moment, would this be a tradable zone going into today’s sessions? In favor of going long from here, we have the following noted:

1. AB=CD pattern completion point around the 123.12 mark – see red arrows.
2. Psychological support coming in at 123.00.
3. Positioned just above daily demand at 122.15-122.86.

The above points, in our opinion, are not enough to set a pending buy order at the current 4hr demand since the following may play against a buy in this market:

1. There is space for price to move lower on the weekly timeframe down to the weekly swap (demand) area at 122.01-121.40.
2. The daily demand zone (see above) positioned just below our current 4hr demand area may act as a magnet to price – one would need to at the very least to expect a fakeout lower.

So, with the above in mind, our team has decided that once/if price reaches the aforementioned 4hr demand zone; our current short position will be closed and we’ll begin watching the lower timeframes for CONFIRMATION to enter long.

Levels to watch/ live orders:

• Buys: 123.00-123.23 Tentative – confirmation required (Stop loss: dependent on where confirms this area).
• Sells: 123.901 LIVE (Stop loss: still currently at breakeven).

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