A close below 110 is likely a strong bearish cue
After failing to sustain gains beyond the 111 handle the USD/JPY fell sharply on Tuesday, taking out the H4 mid-level support band at 110.50 and closing out the day in the shape of a full-bodied daily bearish candle.
Directly beneath current price, the 110 handle can be seen on the H4 timeframe. Already in play, however, is the daily support level at 110.21. Over on the weekly timeframe, there’s little support seen stopping price from trading as far south as the weekly trendline support etched from the low 98.78, followed closely by a weekly support area at 105.19-107.54.
Market direction:
Selling alongside current momentum would, in our humble view, not be a high-probability move. Not only is 110 lurking nearby, one also has to contend with current buying pressure from the noted daily support. Only after a decisive H4 close is seen below 110 would we be convinced that the bears are making a play for the daily support at 108.78.
In regard to buying, we would also exercise caution. This is due to little weekly support seen in the frame, and the strength of the sellers at this time.
Data points to consider: US existing home sales at 3pm GMT.
Areas worthy of attention:
Supports: 110 handle; 110.21; 108.78; Weekly trendline support; 105.19-107.54.
Resistances: 110.50.
Directly beneath current price, the 110 handle can be seen on the H4 timeframe. Already in play, however, is the daily support level at 110.21. Over on the weekly timeframe, there’s little support seen stopping price from trading as far south as the weekly trendline support etched from the low 98.78, followed closely by a weekly support area at 105.19-107.54.
Market direction:
Selling alongside current momentum would, in our humble view, not be a high-probability move. Not only is 110 lurking nearby, one also has to contend with current buying pressure from the noted daily support. Only after a decisive H4 close is seen below 110 would we be convinced that the bears are making a play for the daily support at 108.78.
In regard to buying, we would also exercise caution. This is due to little weekly support seen in the frame, and the strength of the sellers at this time.
Data points to consider: US existing home sales at 3pm GMT.
Areas worthy of attention:
Supports: 110 handle; 110.21; 108.78; Weekly trendline support; 105.19-107.54.
Resistances: 110.50.
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