Bulls in the USD/JPY are targeting a retest of 110.00/50.
The Bears must commit between 110 and 110.50 points.
According to the previous study, USD/JPY Price Analysis: One for the Brave, with a goal of 111.90/20, the supply zone has always been a bigger risk for the bulls.
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There will be a case for the USD/JPY to rise if this support structure maintains.
Buying at resistance, on the other hand, should not be part of a trader’s strategy.
The chart below depicts the yen’s market structure from the top down, concluding that a long position should only be made with additional safeguards in place to prevent downside exposure and the danger of a losing transaction.”
“… a transaction can be taken at a lower risk from the following bullish structure in order to limit anticipated losses from failures beyond one’s entry point.
A breach of the 4-hour resistance around 111.20, for example, would be bullish and might re-ignite demand for the daily targets:”
The conditions, however, were never met. Instead, the price has melted through the resistance structure, and the focus has now shifted to the downside:
The resistance was significant in the live market above, and the price has now melted below the 110 barrier.
This puts the market in the hands of bears, who can expect a discount to short in a daily correction like this:
The price has reached a stalemate, and a correction to at least the 38.2 percent Fibonacci level could be in the works, allowing it to test 110 once more. If it gives, the next resistance layer is 110.40/50./n
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