USD/JPY seen testing possible buy zone, traders...
On Wednesday, China’s Commerce Ministry announced it will slap 25% tariffs on USD 16bln worth of US imports, and will begin collecting these tariffs from August 23rd. China said the moves were necessary counter-measures to US tariffs. Demand for the safe-haven yen pulled the USD/JPY beneath the 111 handle in recent trade, consequently exposing a green H4 support area marked below it at 110.65/110.81. We like this area for possible longs due its construction:
• July’s opening level at 110.65.
• H4 support at 110.76.
• 61.8% H4 Fib support at 110.81 (green line).
• Stop-loss orders below 111 will likely provide bigger players the liquidity needed to buy.
Also bear in mind the top edge of daily demand at 110.28-110.78 converges with 110.65/110.81, along with the current weekly trend line resistance-turned support (taken from the high 123.57) intersecting with the lower edge of the daily zone.
Areas of consideration:
On account of the above, 110.65/110.81 remains an area of interest for possible buy trades today (conservative stops can be placed around the 110.57 neighborhood). A H4 close back above 111 from this area would, in our view, be a solid cue to begin thinking about reducing risk to breakeven and taking partial profits off the table.
• July’s opening level at 110.65.
• H4 support at 110.76.
• 61.8% H4 Fib support at 110.81 (green line).
• Stop-loss orders below 111 will likely provide bigger players the liquidity needed to buy.
Also bear in mind the top edge of daily demand at 110.28-110.78 converges with 110.65/110.81, along with the current weekly trend line resistance-turned support (taken from the high 123.57) intersecting with the lower edge of the daily zone.
Areas of consideration:
On account of the above, 110.65/110.81 remains an area of interest for possible buy trades today (conservative stops can be placed around the 110.57 neighborhood). A H4 close back above 111 from this area would, in our view, be a solid cue to begin thinking about reducing risk to breakeven and taking partial profits off the table.
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