USDJPY Top-Down Analysis (Long then Short)

Hello Traders,

Here is the Top-Down Analysis of USDJPY (Monthly, Weekly, Daily for direction and 4H for entry) for

Week 46 - Nov 09

M > Market was moving in a wedge with horizontal support however last week price broke support to the downside and we will now look at downward channel as a guide.

W > Inside the channel we can see Bearish Trend in a downward wedge and price is currently testing bottom of wedge as support. We can expect a correction to the upside.

D > With drop last week price has created an over extended M formation and we can expect correction to the upside till neck of M. We will expect correction till bottom of wick but price can retrace till body of candle as it coincides with 0.382 Fib level on last weekly bearish impulse. In long term we expect price to drop and continue with bearish trend.

As per COT JPY saw addition of Long and closure of Short positions improving net positions. Commercials have added both Long and Short positions, bringing their Short positions to highest in current year, in effect increasing total open interest in JPY. JXY has been gaining strength and it further gained strength last week on account of weak USD. We can expect some correction for JPY in short term.

4H > Currently price has faced rejection at bottom of wedge however it can still continue in its bearish trend, hence will wait for reversal confirmation. In 1H cart price has created a double bottom and we can see bearish divergence. We will use lower time frame for Long entry confirmation.

Pair Correlation > USDJPY does not have any strong correlation with any pair on daily timeframe.

This was my Idea and I hope you find it useful. If you find the analysis of help please leave a LIKE and FOLLOW for receiving all updates during the week. In the comment section share your view or ask questions.

Thank You
AP17FX