On the monthly timeframe, which represents our long-term forecast, we see a mitigation of a previous supply at 150 price handles. This was achieved by the end of 2022. Thereafter in 2023, early in the year, profit-taking pushed the dollar to a previous unmitigated demand at 128 price handle. This confirmed a bearish order flow was at play.
After forming this new low, USDJPY broke the daily structure, confirming a change of character (CHOCH) on the daily time frame. The CHOCH indicates a bullish correction on the horizon. Presently, the market has settled in the demand zone at a price handle of 131.
We intend to go long on this pair. We have our buy limit orders sitting at 128.7 with three optional targets.
- The unmitigated supply is sitting at 142.
- The fresh supply is sitting at 145.
- The unmitigated supply is sitting at 147–148.
Our long-term bias for USDJPY is bearish with a short-term bullish correction. We intend to review our analysis once the 142-148 supplies are mitigated and look for short-term opportunities.
NB: Our analysis is strictly based on supply and demand, suitable for swing traders.
Risk Warning: CFDs carry a high level of risk to your capital, and you should only trade with money you can afford to lose. Trading may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary.
Disclaimer: I am not a financial advisor, and I am not telling you where or when to take a trade. I express my personal opinion only. Trading in financial markets involves risk. I am not responsible for any losses incurred due to your trading. I do not recommend any specific trade or action, and any trades you decide to take are your own.