USDJPY Downtrend after Distribution
Dynamic trend: Down
Background: W1 – weak; D1 – weak
Phase: The market is downtrending after significant distribution on the last top (mark down)
In point 1 there was an Up‐thrust with very high volume (climax). The next bar was a down bar with high volume, which confirmed selling (weakness) in point 1. VSA showed major supply on timeframe H1 and H4. An upthrust is a bar that makes a higher high than the previous ones, but closes on the lows or mid of the range; it’s a supply bar, usually appearing on fake-breakouts or stop hunting.
In point 2 there was another Up‐thrust again, which showed overall weakness. Also, the volume in point 2 was much lower the volume in point 1, which means the supply in point 1 has overcame demand.
Note: due to obvious weaknesses of background in the area 2.1, it’s recommended to switch to the M15 timeframe to search for “No demand” as the potential point of entry. Often these appear with a good risk:reward ratio (1:4 or more)
In point 3 there was another Up‐thrust with very high volume.
In point 4 there was No Demand. It confirmed overall weakness.
Consider going short when the price gets back to 103.50 area, and VSA produces No Demand signal (those would be low volume up bars). This is an area of previous weakness, and a round number, which means there will be retail traders to shakeout at that area.