ICmarkets

USD/JPY: Technical outlook and review.

FX:USDJPY   U.S. Dollar/Japanese Yen
25 0 1
4hr TF.

The higher-timeframe picture resembles the following:

• Weekly timeframe: A long-term weekly R/S flip level at 101.206 has been providing support to the market now since the 3rd of February 2014, so this is definitely a level worth watching.

• Daily timeframe: Current trading action is taking place just below a daily supply area at 101.962-102.257, if we see a break above this area; it would likely confirm buying strength from the aforementioned weekly R/S flip level.

A break above the 101.902 level was seen and price reached the round number area 102 relatively stress free, as reported may happen in the last analysis.

Price is currently seen trading between the aforementioned round number 102 and a 4hr decision-point level below at 101.754, where could price be likely headed next???? Well, considering the weekly timeframe shows buying pressure being seen off of a long-term weekly R/S level (see above for levels); we certainly are expecting higher prices yet to come. There is one snag here, and this is the main reason we closed our long position so quickly (101.772), price has now hit daily supply (levels above). We know the higher timeframes usually overrules, but this does not mean a small bearish reversal may not be seen. So, taking all of the above into consideration, the most likely scenario in our opinion could well be a push south back down to the 4hr decision-point level at 101.754, and then to follow a bigger push higher. However, a decline may not be seen straight away, pro money may require liquidity to do this (buy orders). So expect the round number to get faked above, this will stop out any traders attempting to fade the level and also trap any breakout buyers, thus giving pro money the much needed liquidly to sell price back down to the aforementioned 4hr decision-point level.

Pending/P.A confirmation orders:

• Pending buy orders (Green line) are seen just above the decision-point area (101.187-101.276) at 101.292. The reason a pending buy order has been set here is because this remains an important area as this is the likely where pro money buyers made the ‘decision’ to push prices higher above the D/S flip area at 101.400-101.465, making this zone a magnet for a first-time reaction.
• The pending buy order (Green line) set just above the decision-point level (101.754) at 101.772 has now been closed. Our take-profit level was set around the 102 area and was nicely hit, so we took full profit.
• New pending buy orders (Green line) are seen above the decision-point level (101.754) at 101.797. Our reasoning behind placing a buy order here is because we expect a small drop down to this area before higher prices are seen as we are currently trading off of a huge weekly R/S flip level at 101.206.
• No P.A confirmation buy orders (Red line) are seen in the current market environment.


• Pending sell orders (Green line) are seen just below supply (103.294-102.983) at 102.953. A pending sell order was set here due to this being an area where likely unfilled sell orders are.
• P.A confirmation sell orders (Red line) are seen just below supply (102-191-102.104) at 102.074. A P.A confirmation sell order was used here purely for the simple fact we are trading around a higher-timeframe weekly support level at 101.206 meaning we may see a small reaction, but nothing to write home about, hence the need for confirmation!

• Areas to watch for buy orders: P.O: 101.292 (SL: 101.166 TP: Dependent on price approach) 101.772 (Trade closed in full profit) (SL: 101.686 TP: 102.000) 101.797 SL: 101.682 TP: Dependent on price approach). P.A.C: No P.A confirmation buy orders are seen in the current market environment.

• Areas to watch for sell orders: P.O: 102.953 (SL: 103.317 TP: Dependent on price approach) P.A.C: 102.074 (SL: likely will be set at 102.214 TP: Dependent on approaching price action after the level has been confirmed).
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