USDJPY MARKET ANALYSIS

 Good afternoon traders, it's Monday the start of a new week in the markets and I hope you're all fresh and ready for it. Into the markets today I am looking at USDJPY where price dropped to a key H1 & H4 demand zone at 154.664 & 154.096 which was the origin of the previous rally to the H1 & H4 higher high at 156.600. Price filled the H1 & H4 range from the H1 & H4 demand zone to the H1 & H4 higher high and back to the H1 & H4 demand zone. Price dropped into the zone and formed rejection wicks with candle closes inside demand on H4 followed by a bullish push. Took buy positions at 154.100 with SL at 153.800 and scale-in positions at 154.600 with SL at 154.360. Setup taken is a drop base rally, a reversal setup and my target is at 156.600.

Price rallied 120 pips to 155.300 forming a higher high showing a potential continuation of the rally higher. Price failed to break the H1 high at 155.600 and instead retraced back to demand and eventually broke below demand forming a lower low at 153.400 hence hitting my SL, taking out my positions and invalidating my setup.

 

Price dropped to the next H1 & H4 low at 153.400 forming candle closes below demand but on the daily chart formed a strong rejection wick with candle closes inside demand followed by a strong rally out of demand. Price retested demand at 154.670 then rallied strongly breaking the previous H4 high at 155.300 and formed higher highs at 155.770.