USD/JPY Weekly June 17-21

Monthly

Yen monthly chart is very informative as for those traders who hold positions within months as for traders who trade on lower time frames. Trend is bullish here, and market has exceeded as Yearly pivot (around 83) as Yearly PR1 (around 90.16). This tells us that current move up probably is not just a retracement after solid downard trend, but it could medium-term reversal. And rest of the year tendency could continue. Yes, it could be some retracements and pullbacks, but upward tendency has nice chances to hold. 

Second moment is – market has shown first upward swing that is greater than previous swing down and broken lower -highs, lower-lows tendency. This confirms first conclusion about possible upward continuation, but also warning us about possible compounded deep retracement. In most cases due previous strong downward momentum market shows AB-CD retracement down after reversal swing. 

Third is market stands at resisance and overbought. Now it shows reasonable retracement down. If this situation to treat as “Stretch” pattern, then price stands very close to it’s target around 90-90.50 area – middle area between oversold/overbought bands (I do not have oversold band here, but I’ve checked the level). 

Finally the fourth – this is context for DiNapoli B&B “Buy” trade. This definitely will not be DRPO, since market already has hit major 3/8 Support. But B&B trade has not been confirmed yet, since we do not have close below 3x3 line. Now we have only minimum required bars in up thrust (8 bars) and reaching significant support level. What kind of action we could see here? The perfect and mostly desirable scenario will be if price will continue slightly lower in June and hit 50% support around 90.50 area. This will be fastest B&B development.

But if market will show upward move istead and show long upward candle in July then B&B will be postponed. The chances are not great mostly due overbought condition, but this is possible if, for example BoJ will release some strongly supportive steps to announced policy of Yen weaken. 

That’s being said in long-term perspective upward action probably will continue, but before that market will have to correct strong overbought condition and this could be done by directional trades, such as B&B. This will be solid assitance and advantage for us, because we will know the direction for the whole month and second – this could give us excellent oportunity to open long-term position on Yen appreaciation with minimum risk. 

Weekly

We’ve seen this picture in Friday’s daily video. In fact weekly chart is mostly significant for us, since it holds context for our trading on lower time-frames. Trend is bearish here, market is strongly oversold and has passed through all monthly support pivots, thus, I even do not have them on this chart. This is perfect setup of B&B “Buy” trade with minimum target around 100. Currently we do not know whether we will get B&B on monthly and when, how it will appear and so on, but here we have it and just wait at which level market will find support to show bounce up. Weekly pattern could coincide with monthly if market will bounce from 50% support area. But at some reason I suspect that bounce up could come from major 3/8 support and right at nearest Wed at FOMC meeting. So we will have to watch for reversal patterns around 93-94 area on lower time frames. They could give us the sign that weekly B&B has started. 

Daily

There is no much information on daily time frame yet. Unfortunately we haven’t take a look at Yen chart earlier – in April-May. It was butterfly “Sell” right at monthly resistance and oversold. Anyway, now market stands with downward move. All that I see here is just butterfly’s target levels and “lightning bolt” AB=CD pattern. Trend is bearish here and market oversold as well. 1.27 butterfly extension coincides with nearest major 3/8 level, while 1.618 stands slightly higher than 90.50 50% support level. AB-CD target is also stands around 50% weekly support. Currently is very difficult to understand whether market will start B&B right from current level of 3/8 major support or proceed slightly lower to 50%. Still, the precise entry point for us not as important as it could be on hourly chart, for instance, because this is weekly B&B. Even if we will miss precise entry point we will have a lot of time to open position on some retracement. But this does not release us from monitoring daily chart and looking for potentially upward reversal pattern. 

4-hour

Looks like here we have something. This is potential Butterfly “Buy” with 1.618 target around major 3/8 support and 50 pips higher than daily AB-CD target. This butterlfy is accompanied by MACD bullish divergence and bearish dynamic pressure – see, trend holds bullish but price action moves lower. Also overall dynamic gradually is taking the shape of the wedge pattern. This increases bounce chances from our prespecified area of 91.50-92.20.

60-min
Trend is bearish here and we have another one smaller pattern, that has 1.618 target at the same area of 92.50 level. Well, probably these two butterflies should become the object of our close attention in the beginning of the week.

Conclusion

Yen currently is a goldmine of contexts for trading at any taste – long-term, short-term, harmonic patterns, DiNapoli patterns. 

Long-term picture points on possible upward continuation during second half of the year. But currently Yen is strongly overbought and probably will enter in phase of retracements and accommodation of current level. This in turn carries and gives us context for trading. Major pattern that we expect right now is B&B “Buy” on weekly   time frame . 

Since market now stands very close to major   support level and shows the signs of exhausting on intraday charts, we will have to keep a close eye on 92.50 area on the next week, since market could start bounce from it. Target of possible move up is 100 area. As usual – if market will show fast acceleration through 92.50 – do not take long position and wait further clarification. 

 

YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS 
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED. 

 Do your own due diligence. 

No one knows tomorrow's price or circumstance. 
 I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader. 
I do not accept responsibility for being incorrect in my speculations on market trend. 

 King Regards