H1 falling wedge about ready to pop

2020年6月11日

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 between 118.66/104.62.

The month of March concluded by way of a long-legged doji candlestick pattern, ranging between 111.71/101.18, with extremes piercing the outer limits of the aforementioned descending triangle formation. April was pretty uneventful, ranging between 109.38/106.35. May also remained subdued, ranging between 108.08/105.98, with June currently off best levels, down 0.8%.

Areas outside of the noted pattern can be seen at supply from 126.10/122.66 and demand coming in at 96.41/100.81.

Daily timeframe:

Partially altered from previous analysis –

Recording its fourth successive decline Thursday, demand at 105.70/106.66 welcomed price action and, as you can see, has so far held its upper boundary.

Recent downside has tripped any sell-stops circling under 107.07 (May 29 low) and perhaps provided enough fuel to stage a healthy rebound from 105.70/106.66.

H4 timeframe:

Familiar support at 106.91 made a showing yesterday, though was unable to latch onto anything solid as risk sentiment favoured a shift into safe-haven assets.

Consequently, demand at 106.49/106.66 squeezed into view and knocked some of the wind out of the pair’s descent yesterday, prompting a possible revisit of 106.91.

H1 timeframe:

Partially altered from previous analysis –

Since Tuesday, H1 has been compressing within the walls of a falling wedge pattern (108.52107.92), which, in this case, could serve as a reversal signal. 107.32 (green) gave way as support Wednesday, with 107 also giving up ground Thursday.

A decisive breakout above the H1 falling wedge (and preferably the 107 level) would be viewed as an encouraging sign to the upside, perhaps eyeing H1 resistance at 107.32 and supply at 107.86/107.67.

The RSI indicator is also seen producing bullish divergence out of oversold territory.

Structures of Interest:

Following a breakout above the H1 falling wedge (most traders will also want to see 107 taken to cover H4 resistance at 106.91) buyers, thanks to daily price testing daily demand at 105.70/106.66, could stage an intraday recovery today towards H1 resistance at 107.32 and H1 supply from 107.86/107.67.