USD/JPY update from Tuesday's analysis...

21 апр. 2020 г.

USD/JPY:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

Since kicking off 2017, USD/JPY has been busy carving out a descending triangle pattern between 118.66/104.62. The month of March concluded by way of a long-legged doji candlestick pattern, ranging between 111.71/101.18, with extremes piercing the outer limits of the aforementioned descending triangle formation.

Areas outside of the noted pattern can be seen at supply from 126.10/122.66 and a demand coming in at 96.41/100.81.

Daily timeframe:

Brought forward from previous analysis -

Leaving demand from 105.70/106.66 unopposed, USD/JPY seems to be in the process of forming a double-bottom pattern from 106.87 (black line). Although the 200-day simple moving average (SMA), currently circulating around 108.30, could hamper upside, pattern traders will still be watching/hoping for a break above the 109.38 April 6 high (red arrow) to confirm the double-bottom pattern. This potentially preps the ground for moves to 111.30ish based on the double-bottom’s take-profit target (usually measured from the lowest trough to the peak and then adding this value to the breakout point).

H4 timeframe:

Partially altered from previous analysis -

Demand at 106.75/107.22 remains a feature on the H4 timeframe, capping downside since the beginning of the month and sited just ahead of daily demand underlined above at 105.70/106.66.

Interestingly, since the beginning of last week the candles have been compressing within what appears to be a bearish pennant pattern between 106.92/108.08. Monday, as you can see, spent the session meandering within the pattern, though Tuesday put in a move to lows at 107.28 before retracting back into the pennant formation. A decisive move south will likely overwhelm buyers from H4 demand and potentially make a run for demand at 105.75/105.17.

H1 timeframe:

The early hours of trade Tuesday observed a breakout to the downside of a descending triangle pattern which, according to traditional interpretation, reached its take-profit target (measured by taking the distance of the base and adding it to the breakout point). Following this, we put in a bottom heading into the London session ahead of demand at 106.99/107.16 (holds 107 within), which saw the candles retake 107.50 as well as the 100-period SMA (107.67), placing the pair within close proximity of familiar supply drawn from 108.16/107.99 (holds 108 within).

As of current price we are poised to retest the 100-period SMA.

Structures of Interest:

As stated in previous analysis, long-term direction is difficult right now. Monthly price could effectively pop either way, while daily price, although showing signs of a potential double-bottom pattern at 106.87, may be hindered by the 200-day SMA at 108.30.

A decisive H4 close beneath the current bearish pennant pattern suggests we may head lower, though most traders will want to see H4 demand at 106.75/107.22 cleared before taking action. In terms of the H1 timeframe, we may see a pop north to supply at 108.16/107.99 before sellers step in.