Interesting price action on USD/JPY, traders!

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 February’s end. March trades lower by 5.00%, breaching the lower edge of the descending triangle and is poised to connect with a demand area at 96.41/100.81.

Daily timeframe:

Monday’s near-300-point decline dipped through a number of key technical supports and landed within demand fixed from 100.68/101.85 (an area glued to the top edge of monthly demand underscored above at 96.41/100.81), hauling the RSI deeper into oversold ground, its lowest level since 2019.

The upward lift from current demand draws the limelight to resistance at 102.77; a break, however, has 104.44/105.06 on the radar as possible supply.

H4 timeframe:

Monday’s decline formed a nice-looking supply zone priced in at 105.75/105.17, while downside, as highlighted on the daily timeframe, is capped by demand at 100.68/101.85.

H1 timeframe:

Coronavirus remains the market’s key driver, guiding the pair to lows of 101.18 Monday. Global equities tanked, along with US Treasuries and the US dollar index.

Technical research based on the H1 timeframe reveals 102 holding ground, with the pair recently firming above 103 and a joining channel support-turned resistance (104.99). Continued upside here has 104 in view, intersecting closely with channel resistance (107.38) and supply coming in at 104.61/104.18.

Structures of Interest:

Daily demand at 100.68/101.85 holds firm in Asia, marginally breaking daily resistance at 102.77 and the 103 handle on the H1.

103, along with channel support-turned resistance and daily resistance at 102.77, is likely of interest today as a possible reversal zone and could cap upside.

The H1 supply zone at 104.61/104.18 is another potential area likely on the radar for sellers. A number of technical aspects support this view. Including the H1 surrounding confluence highlighted above, we can also note the lower edge of daily supply at 104.44/105.06 intersects with the said H1 supply zone. All this, coupled with the monthly timeframe recently breaking the lower edge of a descending triangle pattern with room to push lower, is likely enough to entice sellers from 104ish, should we reach this far north.