USDJPY Sideways Movement Between 103.17-104.30

Dynamic trend: Turned up

Background: W1 – weak; D1 – strong

Phase: Accumulation

 

USDJPY Trading Range

USDJPY Trading Range

 

Since the previous analysis, the price continues to remain in the trading range 103.17 – 104.30, with congestion zones formed in between.

 

Point 1 was the breakup up-bar of a strong congestion zone. In the 15 minutes timeframe, there were also clear signs of a bullish movement.

In point 2 there were a series of up-bars with a very high volume. Usually up-bars with a high volume and a wide spread are signs of weakness, but the weakness revealed here was tested in point 3.

In point 3 there was a “Shakeout” with an average spread and a low volume, which can also be regarded as a successful test, indicating «No Supply». We should expect further upward price movement.

 

Suggested Strategies

I recommend buying near the support level of 103.17 after the appearance of significant signs of strength, the beginning of an upward price movement or the appearance of “No Supply”. However, if prices continue to rally, a break-out of the 104.2 level would confirm the buying (accumulation) seen behind. For the time being, prices are just below a weak congestion zone, and it’ll be better to stay in the sidelines, in the hourly timeframe.

EURUSD Hourly Follow-Up

In last week’s post about EURUSD, I wrote that you should look for shorts in a rally to the 1.11 level, as the downtrend didn’t seem yet finished. Prices got halfway there, with the volumes showed lack of demand near that temporary top.

 

Dynamic trend: Turned up

Background: W1 – weak; D1 – weak

Phase: Markdown

 

EURUSD H1 Sideways Range

 

In point 1 there was “Stopping volume” with a wide range and with a very high volume (the highest in the last 166 bars, since the beginning of a downtrend). Taking into account the previous price movement, this volume is likely to be insufficient for a full trend reversal, though we can’t exclude a short-term uptrend.

 

Suggested Strategies

Consider selling if the price breaks down the level 1.0962 and «No Demand» appears (up-bar with a narrow range and a low volume). Also consider buying if the price breaks-out the level 1.1 and «No Supply» appears (down-bar with a narrow range and a low volume).

You can search for «No Demand» and «No Supply» on the lower TF.

How to Trade EURUSD’s Hourly Downtrend

Dynamic trend: Turned down

Background: W1 – weak; D1 – weak

Phase: Markdown

 

EURUSD H1 Chart

EURUSD H1 Chart

 

In point 1 there were a series of up-bars with a wide spread and high volume. This bullish maneuver is a «Potential Buying Climax». The two subsequent down bars confirmed the supply, therefore also confirming the weak congestion zone.

In point 2 there were a series of up-bars «No Demand». These have a special significance, because they were near the bar high of the point 1, and they were inside the weak congestion zone (the zone of previous selling). A good place for a short position.

In point 3 there were a series of up-bars ” No Demand ” with subsequent down-bar and “Up-Thrust” with low volume. Due to the weakness behind, one should look for a breakout of the congestion zone.

 

Suggested Strategies

Wait for a rally to 1.11 to consider shorting, if there is either more supply or no-demand bars.

USDJPY Reaching Important Resistance Before NFP

Tomorrow at 1:30pm BST the NFP and unemployment numbers are being released, which could provide the breakout of critical levels in USD pairs, such as in USD/Yen.

 

Hourly Timeframe

 

USD YEN Trend and Resistance

USD/YEN Hourly – Trend and Resistance

 

In the hourly, USDJPY is on a clear up trend, within a channel, and approaching the important resistance at 104.32. The market has been rising on high volumes, and the current supply is normal in overhead zones such as this one. Depending on the NFP numbers, the breakout could go either way, and both are trade-able.

  • In case the up trendline breaks, you should go to a lower timeframe such as M15 to trade it, as the movement might not be so prolonged without further rallies and tests.
  • In case there is a breakout to the upside, it should be traded on H4 since it’s a trade to be held for the mid-term.

 

4-Hours Timeframe

 

Before NFP USDJPY 4H

Before NFP USDJPY 4H

 

On the 4 hours timeframe, we can see the prices are actually on a selling congestion zone, which reinforces the plan idea that there should be a breakout to trade it.

Gold and Silver Mid-Term Outlook

After major supply knocked off the precious metals on a sideways trend, gold prices have been oscillating, with no clear direction. Silver on the other hand, has been slightly weaker, with a defined downtrend.

 

Gold

 

Gold Daily Chart Analysis

Gold Daily Chart Analysis

 

The most visible supply bar was the wide red bar by the end of June. The rally then continued on low volume, and more supply seen by VSA signals and weak congestion bars had been appearing.

A selling zone (congestion zone) was formed from the highs at $1370, and prices have repeatedly failed to break it, which along with the low volume in these rallies, suggests an overall lack of demand.

In gold, the $1301.5 level marks the distribution range low, and so its break would give a short opportunity in a lower timeframe such as 4-hours or hourly. A rally to the downtrend on low volume could provide another opportunity to sell.

 

Silver

Daily:

Silver Daily Chart

Silver is in a similar phase to gold’s, albeit its downtrend is clearer. An up trendline was just broken, and so, it’s good to check a lower timeframe to see the recent action in more detail.

 

4 Hours:

Silver H4 Chart

Silver H4 Chart

Prices are now approaching a congestion zone, and a breakout would give a short opportunity. In the daily timeframe, a pullback to the trendline could provide another opportunity to short.

 

In the daily and H4 timeframes we’ve spotted a distribution phase which can give short opportunities when there is a breakout confirmation. Until the market tells otherwise, I maintain a bearish outlook on the mid-term for precious metals.