Previous Week Update:

  • Before:

USDJPY Update 1

  • After:

USDJPY Update

  • The week that passed respected the path A as shown above, but then bounced from 110.500 and then retested that weekly channel resistance and strong 111.500 technical and psychological level. In addition to creating a head and shoulders formation (confirming our long term bearish move now.

Upcoming USD News:

  • Monday –
    • Revised nonfarm productivity q/q
      • Previous – -0.6%
      • Forecast – -0.6%
    • ISM Non-Manufacturing PMI
      • Previous – 57.5
      • Forecast – 57.3
    • Wednesday –
      • Crude Oil Inventories
        • Previous – -6.4M
      • Thursday –
        • Unemployment Claims
          • Previous – 248K
          • Forecast – 241K

Monthly: The month ended with a bearish pin bar formation, and the new candle created a top wick is currently bearish. Looking to fill the wick on the left.

UJ Monthly

Weekly: Closed with a strong bearish candle, with momentum looking to fill the remain wick on the left. In addition, momentum confirmed that lower high and now I am looking for a lower low as drawn at the 106 levels.

UJ Weekly

Daily: There is clear respect on the weekly channel resistance, as it tested it again before dropping with the NFP news. Looking towards the red box as my lower low target sitting around the 106 price zone.

UJ Daily

H4: We broke the bearish flag with a double top confirmation rejection off the weekly channel resistance. We have also got the retest of the previous double top neckline break, where we dropped to a strong area of 110.500. Channel was tested before the NFP and dropped.

UJ H4

Overall USDJPY Analysis

  • NFP was bearish and caused UJ to be rejected off the weekly channel resistance. Where I am now looking for UJ to go down lower to the weekly channel support.
  • 106 Price zone as strong confluence in terms of a psychological + static + channel support + a lower low zone. As a swing trader, I will be looking to hold my positions until there but will of course watch price action.
  • In addition, the coming week there isn’t any major news that would affect the USD in the long run. So, the first target would be 200. The week after however would be the Fed Interest Hikes which would be interesting to see if they still decide to hike it, as data has been bad for the USD.
  • They may hold off the hikes until data proves stronger, but if it is hiked, I have come to believe that it will be a one-off hike for the year unless of course data proves otherwise.

Predicted movement:

UJ Prediction

  • The likely path I see occurring is A, as I think during open Asian session may find a retracement to that zone and during the rest of the session after London open we will continue down to that 109.200 zone.
  • B is possible but highly unlikely. However, with my swing target it will be 106 price zone.