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.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.