$USDJPY Daily Technical Outlook and Review – Friday 29th August

The higher-timeframe picture resembles the following:

• Weekly TF: Buyers and sellers are now firmly trading around a beautiful-looking weekly supply area at 105.432-104.065. We will definitely begin looking for shorts now, and any long positions will need confirmation as we could see some very serious selling take place either this week or the next.
• Daily TF: A break above the daily supply area at 104.104-103.802 has been seen. This likely indicates a lot of the traders who attempted to fade this area with their stop-loss order too close have been stopped out. The path north appears to be relatively clear up to the daily supply area at 104.831-104.505. However before this area gets hit, we must be prepared for a drop down to at least the daily R/S flip level at 102.713 since pro money may not have enough liquidity to push prices higher from here.

The close below the 4hr support level at 103.738 was not very convincing to say the least! We initially said in our last analysis, a close below would likely imply selling interest from the weekly supply area at 105.432-104.065. However, the close below the 4hr support level seen is not good enough for us to be looking for shorts at the moment, since this could very well be a fakeout, and a push higher may well be seen later today back into the current 4hr range (103.738-104.264). in our opinion, It would not be very difficult for the buyers to push prices higher, take a quick look at the pink trendline, notice the wicks (marked by blue arrows) likely consumed the majority of the supply/sellers as price was declining, hence the path north may be relatively clear up to around the upper limits of the aforementioned 4hr range.

For selling interest to be confirmed here, price would need to push below the low marked with a green arrow at 103.491, we would then be looking to play the retest of the 103.738 level down to the round number 103, where we currently have a P.A confirmation buy level set above at 103.037.

Pending/P.A confirmation levels:

• No pending buy orders (Green line) are seen in the current market environment.
• P.A confirmation buy levels (Red line) are seen just above the round number 103 at 103.037. The reason we have not set a pending buy order here is simply because pro money could either perform a deep test of this level, or ignore this level altogether.

• Pending sell orders (Green line) are seen just below 4hr supply (104.831-104.591) at 104.568. The reasoning behind setting a pending sell order here is simply because this area remains untouched, and is located within both weekly supply at 105.432-104.065 and also daily supply at 104.831-104.505 as well.
• No P.A confirmation sell levels (Red line) are seen in the current market environment.

Quick Recap:

A mediocre close below the 4hr range (103.738-104.264) was recently seen, however in our opinion, it’s not convincing enough for us to begin looking for shorts. This could very well be a fakeout, if so; price has very little in its way stopping it from reaching the upper limits of the aforementioned 4hr range, since supply/sellers have already likely been consumed as price was declining (notice the wicks below the pink trendline).

• Areas to watch for buy orders:P.O: No pending buy orders are seen in the current market environment. . P.A.C:103.037 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).

• Areas to watch for sell orders: P.O: 104.568 (SL: 104.873 TP: Dependent on how price approaches). P.A.C: No P.A confirmation sell levels are seen in the current market environment.