Update on the USD/JPY...
Weekly gain/loss: + 14 pips
Weekly closing price: 112.60
Despite the USD/JPY registering its fourth consecutive bullish close last week, the weekly candles appear somewhat exhausted ahead of supply coming in at 115.50-113.85. Although we believe dollar bulls will still likely challenge the noted supply, the back-to-back weekly selling wicks may encourage sellers into the market this week.
In conjunction with weekly flow, the picture on the daily timeframe also reveals space for the bulls to push north this week up to the trendline resistance extended from the high 115.50 (merges nicely with the noted weekly supply). With that being said though, Friday’s bearish selling wick looks somewhat threatening and therefore could force price back down to retest support at 111.91.
The dollar, as you can see on H4 timeframe, moved higher in the immediate aftermath of Friday’s job’s report, breaking out of its current range at 113.21/112.32 and testing nearby supply at 113.57-113.38, which held firm. The push lower from the area was aggressive, almost immediately reclaiming NFP-induced gains and closing the day marginally below October’s opening level at 112.64.
Suggestions: In light of this recent downside push, the 112 handle is back in the spotlight. For those of you who follow our reports on a regular basis you may recall we have been banging the drum about 112 for a while now. Here’s why:
• Positioned directly above daily support at 111.91.
• Located just below July’s opening level at 112.09.
• Sited nearby a Fibonacci cluster comprised of a 38.2% support at 111.96 taken from the low 109.54, a 61.8% support at 112 from the low 111.09 and a 78.6% support at 111.90 drawn from the low 111.47.
• The stop-loss orders planted below the range edge at 112.32. When these stops are triggered they, along with breakout sellers’ orders, become sell orders and thus help provide traders with deep pockets the liquidity required to buy.
Suggestions: With space seen for both weekly and daily action to push higher, coupled with the 112 handle’s surrounding confluence mentioned above, a long from the green H4 buy zone is worthy of attention. As psychological levels are prone to fakeouts, however, you may want to wait for H4 price to confirm buyer intent before pulling the trigger. For us, this would simply be a full or near-full-bodied bullish candle seen within the green zone, which would, in our view, provide enough evidence to hold the position up to at least October’s opening level at 112.64/113 handle.
Data points to consider: No high-impacting news events on the docket – both US and Japanese banks closed today.
Levels to watch/live orders:
• Buys: 111.91/112.09 (waiting for a reasonably sized H4 bullish candle to form – preferably a full, or near-full-bodied candle – is advised, stop loss: ideally beyond the candle’s tail).
• Sells: Flat (stop loss: N/A).
Weekly closing price: 112.60
Despite the USD/JPY registering its fourth consecutive bullish close last week, the weekly candles appear somewhat exhausted ahead of supply coming in at 115.50-113.85. Although we believe dollar bulls will still likely challenge the noted supply, the back-to-back weekly selling wicks may encourage sellers into the market this week.
In conjunction with weekly flow, the picture on the daily timeframe also reveals space for the bulls to push north this week up to the trendline resistance extended from the high 115.50 (merges nicely with the noted weekly supply). With that being said though, Friday’s bearish selling wick looks somewhat threatening and therefore could force price back down to retest support at 111.91.
The dollar, as you can see on H4 timeframe, moved higher in the immediate aftermath of Friday’s job’s report, breaking out of its current range at 113.21/112.32 and testing nearby supply at 113.57-113.38, which held firm. The push lower from the area was aggressive, almost immediately reclaiming NFP-induced gains and closing the day marginally below October’s opening level at 112.64.
Suggestions: In light of this recent downside push, the 112 handle is back in the spotlight. For those of you who follow our reports on a regular basis you may recall we have been banging the drum about 112 for a while now. Here’s why:
• Positioned directly above daily support at 111.91.
• Located just below July’s opening level at 112.09.
• Sited nearby a Fibonacci cluster comprised of a 38.2% support at 111.96 taken from the low 109.54, a 61.8% support at 112 from the low 111.09 and a 78.6% support at 111.90 drawn from the low 111.47.
• The stop-loss orders planted below the range edge at 112.32. When these stops are triggered they, along with breakout sellers’ orders, become sell orders and thus help provide traders with deep pockets the liquidity required to buy.
Suggestions: With space seen for both weekly and daily action to push higher, coupled with the 112 handle’s surrounding confluence mentioned above, a long from the green H4 buy zone is worthy of attention. As psychological levels are prone to fakeouts, however, you may want to wait for H4 price to confirm buyer intent before pulling the trigger. For us, this would simply be a full or near-full-bodied bullish candle seen within the green zone, which would, in our view, provide enough evidence to hold the position up to at least October’s opening level at 112.64/113 handle.
Data points to consider: No high-impacting news events on the docket – both US and Japanese banks closed today.
Levels to watch/live orders:
• Buys: 111.91/112.09 (waiting for a reasonably sized H4 bullish candle to form – preferably a full, or near-full-bodied candle – is advised, stop loss: ideally beyond the candle’s tail).
• Sells: Flat (stop loss: N/A).
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