USDJPY Market Analysis and Trading Strategies.
*Personal Opinion
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Waveforms of each time leg
Weekly
Downtrend.
Uncertain whether the 5th wave of the downtrend will continue down to the end of the 3rd wave or if the price will start reversing upward from here.
Market participants seem hesitant, causing volatility to potentially squeeze into a triangular consolidation pattern on lower timeframes.
Daily
Uptrend.
Price is trading in the lower half of the 148.5 to 142.3 range.
A double bottom has formed, raising expectations for an upward move, but the price was rejected at a slanted neckline.
4-hour
The recent high has not been closed above by candle bodies, so price is currently moving within the 142.5 to 145.1 range, maintaining a bullish bias.
Price may continue to move sideways without clear direction and could start a significant move once it breaks out in either direction.
Hourly
Uptrend.
The recent downtrend was broken, with higher highs and higher lows forming, signaling upward momentum.
Currently, the previous high is acting as support, resulting in a rebound.
Trade Strategies
Strategy①
Since the daily and 4-hour charts are bullish, and the 1-hour chart is also in an uptrend, look to enter long trades targeting the 5th wave of the uptrend.
Strategy②
If the previous high fails to hold as support and price continues to correct, consider entering long near the last swing low, expecting it to act as support.
However, be cautious as a correction this deep during wave 4 might indicate weakening buying pressure.
Strategy③
If the recent high on the 1-hour chart breaks, consider long entries on lower timeframes.
Note that if the price action resembles a triangle pattern (like the white line), the potential range may be limited, leading to poor risk-reward.
Strategy④
If the previous high on the 1-hour chart fails as support and price breaks downward, consider short trades based on price action.
Be aware this is a counter-trend trade against higher timeframes and carries higher risk.
Postscript Trade Strategies
Strategy①
With an uptrend on the 1-hour chart and a corrective downtrend on lower timeframes, wait to enter long as close as possible to the lower boundary.
Waiting for a clear trend reversal might result in poor risk-reward, so look for price action signals near the lower boundary to enter.
