USDJPY Hourly – Strong Background Albeit Mixed Signals
Dynamic trend: Turned down
Background: W1 – weak; D1 – weak
In point 1 there was a combination of two mixed bars. The first – “Shakeout”, with a relatively high volume compared to the last 40 bars; the spread was wide, all of which can be regarded as the accumulation by the Smart Money. The second bar was an up-bar with a wide spread and very high volume which showed supply, since prices didn’t continue to rally.
Further prices decreased, but on declining volume, indicating a lack of interest in lower prices by professionals.
In point 2 there was a “Shakeout”. The volume was significantly lower compared to point 1, which indicates the reduction of the number of sellers.
In point 3 there was the combination of the two bars, which together can be considered as a “Test”. The volume was relatively low. The next bar was an up-bar, which was a confirmation of the success of the “Test.”
In this situation, it’s recommend to refrain from deals due to the mixed signals. If there is a further down movement on low volume to the 101.900 level, there should be a long opportunity with the target on the trendline. The lowest support is at 101.500.