USD/JPY shows strong signs it may be heading lower!
USD/JPY:
Monthly timeframe:
Brought forward from previous analysis –
Since kicking off 2017, USD/JPY has been busy carving out a descending triangle pattern. The breakout for this configuration is common to the downside, but an upward breakout is considered more reliable and profitable.
Outside of the current pattern, a supply area is visible at 126.10/122.66, while lower on the curve we have a demand area at 96.41/100.81.
Currently, the pair trades +1.45% on the month.
Daily timeframe:
Brought forward from previous analysis –
Despite a reasonably healthy recovery since August 2019, involving the upper edge of a supply area being absorbed, long-term trendline resistance (114.54) has capped upside.
Should we eventually overthrow the said trendline, resistance resides close by in the form of a channel resistance (109.48) and a 78.6% Fibonacci retracement at 110.71 (red level). A rejection, on the other hand, has the 108.31 January 31st low to contend with, as well as nearby channel support (106.48) and demand at 107.82/108.04.
H4 timeframe:
Since early February, price action has stamped out a consolidation between a supply zone coming in at 110.23/110.04 and a supply-turned demand area at 109.65/109.49.
It’s important to take into account the upper edge of this range is bolstered by daily trendline resistance, which may lead to a breakout south to H4 demand at 109.30/109.42.
Another constructive development is the possibility of a head and shoulder’s top forming, though a retest at supply 110.23/110.04 may have to occur prior to the formation of the right shoulder.
H1 timeframe:
Against the backdrop of higher-timeframe flows, short-term action firmed on the back of broad-based USD bidding Tuesday and is currently seen chalking up a harmonic Gartley pattern at 110.03, the 78.6% X-A retracement. Note the 110 handle converges closely with the harmonic level, with a break of the round number likely drawing in supply at 110.25/110.15.
Direction:
With daily price continuing to respect trendline resistance, and H4 action threatening a H&S top pattern, completing the Harmonic Gartley pattern on the H1 may be of interest to sellers in this market, with the possibility of positioning protective stop-loss orders above the H1 supply at 110.25/110.15.
Monthly timeframe:
Brought forward from previous analysis –
Since kicking off 2017, USD/JPY has been busy carving out a descending triangle pattern. The breakout for this configuration is common to the downside, but an upward breakout is considered more reliable and profitable.
Outside of the current pattern, a supply area is visible at 126.10/122.66, while lower on the curve we have a demand area at 96.41/100.81.
Currently, the pair trades +1.45% on the month.
Daily timeframe:
Brought forward from previous analysis –
Despite a reasonably healthy recovery since August 2019, involving the upper edge of a supply area being absorbed, long-term trendline resistance (114.54) has capped upside.
Should we eventually overthrow the said trendline, resistance resides close by in the form of a channel resistance (109.48) and a 78.6% Fibonacci retracement at 110.71 (red level). A rejection, on the other hand, has the 108.31 January 31st low to contend with, as well as nearby channel support (106.48) and demand at 107.82/108.04.
H4 timeframe:
Since early February, price action has stamped out a consolidation between a supply zone coming in at 110.23/110.04 and a supply-turned demand area at 109.65/109.49.
It’s important to take into account the upper edge of this range is bolstered by daily trendline resistance, which may lead to a breakout south to H4 demand at 109.30/109.42.
Another constructive development is the possibility of a head and shoulder’s top forming, though a retest at supply 110.23/110.04 may have to occur prior to the formation of the right shoulder.
H1 timeframe:
Against the backdrop of higher-timeframe flows, short-term action firmed on the back of broad-based USD bidding Tuesday and is currently seen chalking up a harmonic Gartley pattern at 110.03, the 78.6% X-A retracement. Note the 110 handle converges closely with the harmonic level, with a break of the round number likely drawing in supply at 110.25/110.15.
Direction:
With daily price continuing to respect trendline resistance, and H4 action threatening a H&S top pattern, completing the Harmonic Gartley pattern on the H1 may be of interest to sellers in this market, with the possibility of positioning protective stop-loss orders above the H1 supply at 110.25/110.15.
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