USDJPY Market Analysis and Trading Strategies.
*Personal Opinion
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Waveforms of each time leg
Weekly
A downtrend is currently in place.
Price is moving within the range between the recent low and the last swing high.
While the weekly chart maintains a bearish outlook, lower timeframes are showing an active uptrend, with price rising toward the most recent swing high on the weekly chart.
Daily
Higher highs and higher lows are forming, indicating an active uptrend.
Last week saw a significant correction, with price dropping near the most recent swing low, but it has since rebounded and is moving upward again.
The key now is whether the price will continue rising from here, or if the recent high will act as a top and lead to the formation of a double-top pattern.
4-Hour
A downtrend had been in place, but an upward 1st wave has now formed, breaking that trend.
Currently, the price is facing resistance around the 148 yen level, but there’s still a possibility that the 1st wave of the uptrend hasn’t finished yet.
The question is whether a significant correction will occur from here, or if the price will continue rising without a deeper pullback.
1-Hour
An uptrend is in place.
A range is currently forming on the lower timeframes around the most recent high price area.
Trade Strategies
Entered a long position targeting the 3rd wave of the uptrend on the 4-hour chart.
Waiting for the 2nd wave pullback, while monitoring price action and chart patterns for confirmation.
Ideally, the price will retrace to the 4-hour trend reversal line or the price zone around the most recent swing low on the 1-hour chart.
If the price breaks upward without a pullback, I’ll consider riding the short-term trend with a long position up to the next resistance level.
However, there’s a high risk of a false breakout, so caution is necessary.
A short entry is being considered, targeting the sharp upward move from the previous rally.
Currently, a range is forming on the lower timeframes, so one approach is to enter a breakout short if the price drops below the range support.
Alternatively, one could take on range risk and enter a short position within the range.
However, there’s a previous high on the 1-hour chart, where buyers may be looking to enter on a pullback.
Additionally, the 4-hour trend reversal line is nearby, which could make it difficult to let profits run.
Update
The recent high on the 1-hour chart has been broken by the candlestick body.
On the 4-hour chart, an upper-wick candlestick is currently forming, which indicates that while there is buying pressure, the selling pressure is also strong.
The direction—whether price continues upward or starts to drop—will likely depend on how this 4-hour candle closes.
