108 appealing for shorts, traders...
USD/JPY:
US Treasury yields continued to explore higher ground Tuesday, with the 10-year note reaching highs of 1.74%. Also reinforcing the USD/JPY was rising US equity markets.
Recent bidding witnessed the USD/JPY’s H4 candles enter the parapets of a resistance area coming in at 107.88-107.46. The said zone boasts a reasonably strong standing, therefore a response from within its walls is possible. Directly overhead, traders may also wish to acknowledge possible resistance emerging from 108. It may also interest some traders to note the RSI indicator is seen testing overbought territory.
In terms of where we stand on the weekly timeframe, as highlighted in Tuesday’s analysis, Quasimodo support at 105.35 held form, prompting a possible revisit at trend line resistance (extended from the high 112.40). Note this trend line also happens to intersect with the upper boundary of the H4 resistance area highlighted above at 107.88-107.46. Looking at the daily timeframe, the technical picture emphasises further upside may be in store, targeting trend line support-turned resistance (extended from the low 106.78) in the shape of a potential ABCD correction terminating at 108.
Areas of consideration:
Although a response is possible from the H4 resistance area at 107.88-107.46, a fakeout through this area to orders sitting at 108 is also a strong possibility. Also note the current weekly trend line resistance intersects with the UPPER limit of the H4 resistance zone and the daily candles are on course to complete an ABCD correction at 108.
Based on the chart studies, everything points to a move towards 108ish before sellers step in. An ideal scenario would be for H4 price to chalk up a bearish candlestick configuration that pierces through the upper edge of the current H4 resistance area, tripping a portion of buy stops, and tagging in sellers from 108 (see chart for a visual representation of a shooting star pattern).
US Treasury yields continued to explore higher ground Tuesday, with the 10-year note reaching highs of 1.74%. Also reinforcing the USD/JPY was rising US equity markets.
Recent bidding witnessed the USD/JPY’s H4 candles enter the parapets of a resistance area coming in at 107.88-107.46. The said zone boasts a reasonably strong standing, therefore a response from within its walls is possible. Directly overhead, traders may also wish to acknowledge possible resistance emerging from 108. It may also interest some traders to note the RSI indicator is seen testing overbought territory.
In terms of where we stand on the weekly timeframe, as highlighted in Tuesday’s analysis, Quasimodo support at 105.35 held form, prompting a possible revisit at trend line resistance (extended from the high 112.40). Note this trend line also happens to intersect with the upper boundary of the H4 resistance area highlighted above at 107.88-107.46. Looking at the daily timeframe, the technical picture emphasises further upside may be in store, targeting trend line support-turned resistance (extended from the low 106.78) in the shape of a potential ABCD correction terminating at 108.
Areas of consideration:
Although a response is possible from the H4 resistance area at 107.88-107.46, a fakeout through this area to orders sitting at 108 is also a strong possibility. Also note the current weekly trend line resistance intersects with the UPPER limit of the H4 resistance zone and the daily candles are on course to complete an ABCD correction at 108.
Based on the chart studies, everything points to a move towards 108ish before sellers step in. An ideal scenario would be for H4 price to chalk up a bearish candlestick configuration that pierces through the upper edge of the current H4 resistance area, tripping a portion of buy stops, and tagging in sellers from 108 (see chart for a visual representation of a shooting star pattern).
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