The 112 handle shows strong confluence for a long...
The USD/JPY experienced a somewhat aggressive downside move on Thursday after whipsawing through the underside of the 113 handle. Influenced by overall dollar losses (USDX traded from H4 resistance at 11962), the pair ended the day closing 30 or so pips ahead of the 112 handle.
Although intraday movement shows bids coming into the market as we write, the 112 handle is, in our technical view, an incredibly appealing level at the moment. Here’s why:
• Positioned directly above daily support at 111.91.
• Located just below July’s opening level at 112.09.
• Nearby a 61.8% Fib support at 112.16 taken from the low 111.47.
• Boasts a 127.2% Fib ext. point at 112.12 extended from the high 113.25.
Suggestions: With space seen for both weekly and daily action to push higher, coupled with the 112 handle’s surrounding confluence mentioned above, longs from the green H4 buy zone are worthy of attention. As psychological levels are prone to fakeouts, however, the team has decided to wait for H4 price to confirm buyer intent before pulling the trigger. For us, this would simply be a full or near-full-bodied bullish candle formed within the green zone, which would give us the confidence to hold up to at least 113/H4 supply at 113.57-113.38.
Data points to consider: US Core PCE at 1.30pm; FOMC member Harker speaks at 4pm.
Although intraday movement shows bids coming into the market as we write, the 112 handle is, in our technical view, an incredibly appealing level at the moment. Here’s why:
• Positioned directly above daily support at 111.91.
• Located just below July’s opening level at 112.09.
• Nearby a 61.8% Fib support at 112.16 taken from the low 111.47.
• Boasts a 127.2% Fib ext. point at 112.12 extended from the high 113.25.
Suggestions: With space seen for both weekly and daily action to push higher, coupled with the 112 handle’s surrounding confluence mentioned above, longs from the green H4 buy zone are worthy of attention. As psychological levels are prone to fakeouts, however, the team has decided to wait for H4 price to confirm buyer intent before pulling the trigger. For us, this would simply be a full or near-full-bodied bullish candle formed within the green zone, which would give us the confidence to hold up to at least 113/H4 supply at 113.57-113.38.
Data points to consider: US Core PCE at 1.30pm; FOMC member Harker speaks at 4pm.
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