Sorry for the late post, haven’t been posting in a few days. Here is just a quick follow up post to the USDJPY demand zone. Let’s take a look at how to trade it.
I marked a fresh demand zone on this pair some time last week I believe and it looks like this zone has been tested. In fact, it looks like it is being tested at the moment.
This level was tested earlier today, which was quite surprising considering how deep price entered this zone. If you traded this, it should not come as a surprise that this supply zone would not last too long. Now we are in for another test actually. Price breaks lower and now this becomes the classic support turned resistance chart pattern.
This isn’t too surprising and I can see the price falling lower. Once again, here is the monthly chart and so far the first bearish candle has appeared so it seems like this level is tested.
Looking at the monthly, the potential retracement could be as low as 106.xx to the 38.2 level. The most recent is the 116.20 level is the daily target. Currently, the monthly supply zone is holding up. I would not be looking to go long until the arrival of the next zone, which does not look to be of some time. A short term sell would work out pretty well with a stop just above the resistance would work.