Daily view: From this angle, it appears the USD/JPY pair has begun chiseling out a consolidation zone between daily support seen at 118.62 (located deep within the aforementioned weekly demand area), and a daily Quasimodo coming in at 120.35. Recent action shows that the rebound seen from the upper limits of this range (120.35) extended lower during yesterday’s session. In the event that the sellers can continue with this tempo today, it’s likely we’ll see prices challenge the ascending daily extended from the low 115.55.
4hr view: The recent descent on this pair took out both the 4hr demand area at 119.60-119.74, and the mid-level number 119.50. As of now, we can see that price is retesting 119.50 as resistance. Providing that the sellers remain strong here, we could potentially see a sell off today down towards the 119.00 handle. Our rationale behind this idea comes from recent price behavior. Check out the swing low seen marked with a black arrow at 119.19, this spike stabbed through the low 119.25, likely consuming most of the buyers and trapping a ton of breakout sellers. This – coupled with the fact that the daily scale is showing room for prices to continue south could be a sign that prices want to test the 119.00 number today.
As we can see, price has already reacted from the 119.50 region; it’s now up to us to find a suitable setup on the lower timeframes to confirm this level, stop-loss placement for this trade will be dependent on where one confirms this level, good luck!
Our current buy/sell orders:
• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: 119.50 area (Predicative stop-loss orders seen at: dependent on where one confirms this level).