H4 bearish pennant pattern faces demand
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 0.9%.
Areas outside of the noted triangle 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 –
Demand at 105.70/106.66 welcomed price action into the closing stages of the week. Despite Thursday’s mild recovery, underlying bids remained soft Friday. This threatens a dive into the aforesaid demand this week.
The 200-day simple moving average at 108.40 has been flattening since mid-March, and represents achievable resistance should a rotation to the upside come to fruition.
H4 timeframe:
Since Thursday, H4 price has been in the process of establishing a tight bearish pennant pattern between 107.13/106.66, considered among market technicians to be a continuation pattern.
Interestingly, the pattern is centred around resistance at 106.91 and is deriving some support off demand close by at 106.49/106.66, an area fixed at the top edge of daily demand from 105.70/106.66.
H1 timeframe:
107 has proved a wholesome resistance, withstanding a number of upside attempts in the second half of the week. Also intersecting with 107 is trendline resistance (107.62); the 100-period simple moving average is also seen closing in on the round number, currently circulating the 107.10 region.
To the downside on the H1 timeframe, local demand is relatively limited, therefore focus will likely remain on H4 demand underlined above at 106.49/106.66.
Structures of Interest:
Long term:
Daily price recently bumped back into demand at 105.70/106.66 and is holding, albeit lacking impetus.
Short term:
The H4 bearish pennant pattern suggests the prospect of further losses this week, though at the same time faces opposition off H4 demand at 106.49/106.66, which as we already know, is linked with the upper boundary of daily demand at 105.70/106.66. As such, if the lower limit of the H4 bearish pennant gives way, traders can expect a potentially uncomfortable ride to its take-profit target (measured by taking the preceding move and adding this value to the breakout point).
(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 0.9%.
Areas outside of the noted triangle 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 –
Demand at 105.70/106.66 welcomed price action into the closing stages of the week. Despite Thursday’s mild recovery, underlying bids remained soft Friday. This threatens a dive into the aforesaid demand this week.
The 200-day simple moving average at 108.40 has been flattening since mid-March, and represents achievable resistance should a rotation to the upside come to fruition.
H4 timeframe:
Since Thursday, H4 price has been in the process of establishing a tight bearish pennant pattern between 107.13/106.66, considered among market technicians to be a continuation pattern.
Interestingly, the pattern is centred around resistance at 106.91 and is deriving some support off demand close by at 106.49/106.66, an area fixed at the top edge of daily demand from 105.70/106.66.
H1 timeframe:
107 has proved a wholesome resistance, withstanding a number of upside attempts in the second half of the week. Also intersecting with 107 is trendline resistance (107.62); the 100-period simple moving average is also seen closing in on the round number, currently circulating the 107.10 region.
To the downside on the H1 timeframe, local demand is relatively limited, therefore focus will likely remain on H4 demand underlined above at 106.49/106.66.
Structures of Interest:
Long term:
Daily price recently bumped back into demand at 105.70/106.66 and is holding, albeit lacking impetus.
Short term:
The H4 bearish pennant pattern suggests the prospect of further losses this week, though at the same time faces opposition off H4 demand at 106.49/106.66, which as we already know, is linked with the upper boundary of daily demand at 105.70/106.66. As such, if the lower limit of the H4 bearish pennant gives way, traders can expect a potentially uncomfortable ride to its take-profit target (measured by taking the preceding move and adding this value to the breakout point).
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