USD/JPY: North or south, that is the question.

FX:USDJPY   U.S. Dollar / Japanese Yen
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Weekly Timeframe: The USD/JPY continues on its relentless march north, consequently spiking (118.968) above a major weekly supply area coming in at 117.931-116.799. The question we need answering is, is this spike a fakeout for lower prices, or is indeed a continuation move for a rally higher? Hopefully the lower timeframes can help.

Daily Timeframe: The daily timeframe shows that price has pushed above a daily support flip level at 117.931 directly into a daily supply area coming in at 119.820-118.700. Therefore, for the current weekly spike to be a fakeout, follow-through selling will need to be seen from here. On the other hand, if price consumes this supply area, we know with a high probability this indeed was likely a continuation spike for a continuation move.

4hr Timeframe: The 4hr timeframe shows that price did indeed break above 118 as expected, which in turn met selling interest from the aforementioned daily supply area. This has consequently forced prices back down to 118 where buying tails are currently being seen. Buying here is tempting – very tempting! However, we are going to be watching the lower timeframe for confirmation before entering long, since we could be potentially buying against higher-timeframe sellers, which is usually not the best path to take!

Buy/sell levels:

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

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

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