Tech outlook for the USD/JPU
Weekly gain/loss: -0.49%
Weekly closing price: 111.50
Recent movement on the weekly timeframe shows that price extended losses last week, reaching lows of 111.06. With 111.68 (the low marked with a green arrow) now potentially out of the picture, there is, according to weekly structure, room for further downside down to as far as the weekly support area at 105.19-107.54, which aligns with a weekly trendline support taken from the low 98.78.
A closer look at price action on the daily timeframe highlights a nearby daily support level coming in at 110.76. This barrier, as you can see, has a moderately respectable history, so it is not one to be overlooked. Before reaching this area, nevertheless, traders have to be prepared for the possibility of a potential retest being seen around the underside of a recently broken daily support-turned resistance at 111.91, which, in our view, has an equally sound history.
Following a somewhat lackluster session on ‘holiday’ Thursday, which consisted of H4 price consolidating around the top edge of a H4 Quasimodo support at 111.20, the bulls went on the offensive throughout Friday’s sessions, reaching a high of 111.62. Overhead, however, there is an interesting sell zone seen between 112 and 111.71. Comprised of a psychological band at 112, the daily resistance mentioned above at 111.91, a H4 resistance coming in at 111.71 and a 38.2% Fib resistance at 111.71, this area is likely to hold ground should it be tested today. Our confidence in this area comes from both the surrounding confluence and the space seen for the market to move lower on the higher timeframes (see above).
Suggestions: 112/111.71 is an ideal location to hunt for shorts, in our humble view. Aggressive traders may wish to enter short at 111.71 and place stops above 112. With that being said, however, this would be a risky move since you’re opening yourself up to unnecessary drawdown, and there is always a chance that the 112 handle could be faked. To that end, our plan of attack here will be to simply wait and see how H4 price responds once/if price enters the green H4 sell zone. A reasonably sized H4 bear candle, preferably a full or near-full-bodied candle would, in our opinion, be a high-probability signal to short, targeting 111.20 as your initial take-profit zone.
Data points to consider: US new home sales at 3pm GMT.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 112/111.71 (waiting for a reasonably sized H4 bearish candle to form – preferably a full or near-full-bodied candle – is advised, stop loss: ideally beyond the candle’s wick).
Weekly closing price: 111.50
Recent movement on the weekly timeframe shows that price extended losses last week, reaching lows of 111.06. With 111.68 (the low marked with a green arrow) now potentially out of the picture, there is, according to weekly structure, room for further downside down to as far as the weekly support area at 105.19-107.54, which aligns with a weekly trendline support taken from the low 98.78.
A closer look at price action on the daily timeframe highlights a nearby daily support level coming in at 110.76. This barrier, as you can see, has a moderately respectable history, so it is not one to be overlooked. Before reaching this area, nevertheless, traders have to be prepared for the possibility of a potential retest being seen around the underside of a recently broken daily support-turned resistance at 111.91, which, in our view, has an equally sound history.
Following a somewhat lackluster session on ‘holiday’ Thursday, which consisted of H4 price consolidating around the top edge of a H4 Quasimodo support at 111.20, the bulls went on the offensive throughout Friday’s sessions, reaching a high of 111.62. Overhead, however, there is an interesting sell zone seen between 112 and 111.71. Comprised of a psychological band at 112, the daily resistance mentioned above at 111.91, a H4 resistance coming in at 111.71 and a 38.2% Fib resistance at 111.71, this area is likely to hold ground should it be tested today. Our confidence in this area comes from both the surrounding confluence and the space seen for the market to move lower on the higher timeframes (see above).
Suggestions: 112/111.71 is an ideal location to hunt for shorts, in our humble view. Aggressive traders may wish to enter short at 111.71 and place stops above 112. With that being said, however, this would be a risky move since you’re opening yourself up to unnecessary drawdown, and there is always a chance that the 112 handle could be faked. To that end, our plan of attack here will be to simply wait and see how H4 price responds once/if price enters the green H4 sell zone. A reasonably sized H4 bear candle, preferably a full or near-full-bodied candle would, in our opinion, be a high-probability signal to short, targeting 111.20 as your initial take-profit zone.
Data points to consider: US new home sales at 3pm GMT.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 112/111.71 (waiting for a reasonably sized H4 bearish candle to form – preferably a full or near-full-bodied candle – is advised, stop loss: ideally beyond the candle’s wick).
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