AB=CD bearish completion at confluence.
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 (118.66/104.62). February had price elbow a touch outside the upper boundary of the aforementioned descending triangle to 112.22, though retreated lower and produced a shooting star pattern into the month’s end.
March, so far, breached the lower edge of the descending triangle, yet has recovered in strong fashion, leaving nearby demand at 96.41/100.81 unchallenged. Note current action trades within touching distance of the descending triangle’s upper boundary.
Daily timeframe:
Partially altered from previous analysis -
Recent upside saw action re-address and dethrone the 200-day SMA, currently circulating around 108.25. Shaped in the form of a near-full-bodied bullish candle, a critical demand-turned supply at 110.10/109.52 was rattled yesterday, perhaps providing a basis for an approach to supply coming in at 112.64/112.10. Traders are, nonetheless, urged to pencil in the possibility of a retest emerging off 110.10/109.52 before price strives for higher terrain.
H4 timeframe:
Broad-based USD bidding – the US dollar index continues to reign supreme against major counterparts – lifted H4 price and finalised the D-leg of an AB=CD bearish pattern at 110.70ish (orange). What’s also interesting is the bearish completion dovetails nicely with channel resistance (105.91) and a DEEP 0.86% Fib retracement ratio at 110.98. It should be noted the current AB=CD pattern’s upper limit (the line in the sand if you will) resides around the 161.8% Fib ext. point at 111.87.
H1 timeframe:
Price action on the H1 timeframe loiters south of 111, with a break exposing neighbouring supply coming in at 111.44/111.20. Downside from this angle has the 110 handle to target, shadowed by demand plotted at 109.53/110.00. Note also the RSI indicator is seen raiding overbought terrain.
Structures of Interest:
Monthly price hovering around notable structure, likely to offer resistance, along with H4 price completing an AB=CD correction (bearish indication) and H1 testing 111, likely appeals to sellers today. Interestingly, though, traders may want to pencil in the possibility of a fakeout through 111 to H1 supply at 111.44/111.20. This will trip any buy stops lurking above 111, filling breakout buyers’ orders and providing liquidity to short from 111.44/111.20, with the possibility of reaching 110.
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 (118.66/104.62). February had price elbow a touch outside the upper boundary of the aforementioned descending triangle to 112.22, though retreated lower and produced a shooting star pattern into the month’s end.
March, so far, breached the lower edge of the descending triangle, yet has recovered in strong fashion, leaving nearby demand at 96.41/100.81 unchallenged. Note current action trades within touching distance of the descending triangle’s upper boundary.
Daily timeframe:
Partially altered from previous analysis -
Recent upside saw action re-address and dethrone the 200-day SMA, currently circulating around 108.25. Shaped in the form of a near-full-bodied bullish candle, a critical demand-turned supply at 110.10/109.52 was rattled yesterday, perhaps providing a basis for an approach to supply coming in at 112.64/112.10. Traders are, nonetheless, urged to pencil in the possibility of a retest emerging off 110.10/109.52 before price strives for higher terrain.
H4 timeframe:
Broad-based USD bidding – the US dollar index continues to reign supreme against major counterparts – lifted H4 price and finalised the D-leg of an AB=CD bearish pattern at 110.70ish (orange). What’s also interesting is the bearish completion dovetails nicely with channel resistance (105.91) and a DEEP 0.86% Fib retracement ratio at 110.98. It should be noted the current AB=CD pattern’s upper limit (the line in the sand if you will) resides around the 161.8% Fib ext. point at 111.87.
H1 timeframe:
Price action on the H1 timeframe loiters south of 111, with a break exposing neighbouring supply coming in at 111.44/111.20. Downside from this angle has the 110 handle to target, shadowed by demand plotted at 109.53/110.00. Note also the RSI indicator is seen raiding overbought terrain.
Structures of Interest:
Monthly price hovering around notable structure, likely to offer resistance, along with H4 price completing an AB=CD correction (bearish indication) and H1 testing 111, likely appeals to sellers today. Interestingly, though, traders may want to pencil in the possibility of a fakeout through 111 to H1 supply at 111.44/111.20. This will trip any buy stops lurking above 111, filling breakout buyers’ orders and providing liquidity to short from 111.44/111.20, with the possibility of reaching 110.
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