Today's Market Analysis
[Daily Chart]
[4-hour Chart]
Daily Chart 4-Hour Chart During Tokyo hours, the strategy is shaped by speculation over fundamentals.
Concerns about China have led to risk-averse behavior, resulting in a strong trend of buying yen, driving the USD/JPY to new lows.
The downward momentum of the yen could potentially incorporate a flurry of stop-loss orders.
Remarks from the BOJ's Mr. Ueda may also provoke selling, and with the BOJ's monetary policy meeting in the following week, a policy change is plausible.
The selling continued during New York hours, with the USD/JPY falling to around 141.60, marking a decline of nearly 6 yen in a single day. Today, a rebound is expected to be of particular interest.
Daily Chart
Yesterday, there was a significant drop of about 6 yen, with the market rebounding in the NY hours, finalizing with a long lower shadow on the candlestick, signaling a bearish close.
Today began under the Bollinger Band’s -2σ (around 144.30), which could serve as a resistance level.
The market has fallen because of both fundamental factors, generating speculation about the extent of the potential rebound.
It's key to keep pace with the opening market's response, taking advantage of high volatility and significant price movements.
4-Hour Chart
The candlestick prior was bullish, and the current one is situated above the Bollinger Band’s -2σ, which is around 143.80.
If this level holds as support, we could anticipate a "sideways to bullish" sentiment, inviting a test for a rebound.
However, take note: a drop below 143.80 would signal renewed selling pressure.
60-Minute Chart:
The 8 AM candlestick opened above the 10EMA but was met with selling pressure, breaching below.
However, it found support near the 4-hour chart’s -2σ around 143.80 and has rebounded.
On the 60-minute chart, the Bollinger Band’s -1σ and the 10EMA are around 143.80 and 144.15 respectively.
Penetrating these levels will dictate the trend to follow - be flexible in your response.
The 4-hour chart hints at possible buying back, but the market's movement will tell.
Today’s USD/JPY Forecast
If Tokyo hours hold support at the 4-hour Bollinger Band’s -2σ around 143.80, expect a buy-back scenario targeting areas from 144.50 to 144.60, and potentially up to 145.00, even testing levels near 145.15 to 145.20.
However, the response from the Tokyo market should dictate whether to adopt a bullish view (testing for a rebound) with long positions, or continue a bearish trend with shorts.
Given the drop was fundamentally driven, be wary of selling on rallies at higher points.
Key lower and upper points are detailed below.
Once a direction is clear, follow the trend to those points, collecting profits incrementally with lower time frame charts.
