USD/JPY: tech report...
US President Trump’s decision to halt some immigration revived demand for the safe-haven yen yesterday. Following an upward rejection of December’s opening level at 114.68 going into the London session, the USD/JPY collapsed, wiping out the 114 psychological handle and clocking lows of 113.44 on the day.
As we write, the weekly candles are seen hovering mid-range between weekly resistance at 116.08 and a weekly support area formed at 111.44-110.10. Meanwhile, down on the daily timeframe, price recently sold off from daily supply at 115.62-114.60 and looks to be on course to test daily demand at 111.35-112.37, shadowed closely by a daily broken Quasimodo line at 110.58.
Our suggestions: Right now, we do not see much room for maneuver. Yes, the 114 handle could be retested as resistance today, but this base lacks any noteworthy confluence, in our opinion. Similarly, the H4 support at 113.25 also has little to offer regarding converging structure.
The only area that really jumps out to us this morning is the H4 demand at 112.05-112.37. With the understanding that this H4 demand base has the backing of not only the current daily demand, but also the weekly support area as well, there’s a fair chance that price will respond from here. While this may be true, traders still need to be prepared for the possibility of a fakeout through this zone, as price may want to drive deeper into the above noted higher-timeframe areas before rallying higher. With that being the case, waiting for at least a H4 bull candle to form may be the better path to take.
Data points to consider: US CB Consumer confidence report at 3pm. Bank of Japan’s monetary policy decision. There is no change expected at this meeting, but traders will be closely focusing on the tone of the central bank, while looking for clues to future policy actions.
As we write, the weekly candles are seen hovering mid-range between weekly resistance at 116.08 and a weekly support area formed at 111.44-110.10. Meanwhile, down on the daily timeframe, price recently sold off from daily supply at 115.62-114.60 and looks to be on course to test daily demand at 111.35-112.37, shadowed closely by a daily broken Quasimodo line at 110.58.
Our suggestions: Right now, we do not see much room for maneuver. Yes, the 114 handle could be retested as resistance today, but this base lacks any noteworthy confluence, in our opinion. Similarly, the H4 support at 113.25 also has little to offer regarding converging structure.
The only area that really jumps out to us this morning is the H4 demand at 112.05-112.37. With the understanding that this H4 demand base has the backing of not only the current daily demand, but also the weekly support area as well, there’s a fair chance that price will respond from here. While this may be true, traders still need to be prepared for the possibility of a fakeout through this zone, as price may want to drive deeper into the above noted higher-timeframe areas before rallying higher. With that being the case, waiting for at least a H4 bull candle to form may be the better path to take.
Data points to consider: US CB Consumer confidence report at 3pm. Bank of Japan’s monetary policy decision. There is no change expected at this meeting, but traders will be closely focusing on the tone of the central bank, while looking for clues to future policy actions.
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