USDJPY Daily Forecast ✍️📈

Boom FX Analysis – USD/JPY (Daily Chart)

Date: December 22, 2024
Key Principles: Simplicity, Experience, Knowledge

Market Overview:

The USD/JPY pair has shown a strong bullish rally recently, reaching a Fair Value Gap (FVG) and tapping into a daily supply zone (OB) around the 160.000 level. This area marks a significant resistance point, with indications of a potential bearish reversal.

• Liquidity Targets:
  • Buy Side Liquidity (BSL): Cleared with the recent push into the supply zone.
  • Sell Side Liquidity (SSL): Positioned below the 144.000 region, near a daily demand zone.
• Market Structure:
  • A recent Market Structure Shift (MSS) suggests potential exhaustion of the bullish trend.
  • Lower lows and break-of-structure patterns (BOS) would confirm a bearish continuation.

Key Zones to Watch:

1. Supply Zone (160.000–158.500):
   • The price is testing this area with signs of rejection.
2. Demand Zone (144.000–142.000):
   • Significant support and a key level for potential bullish retracement or long-term accumulation.

Trade Setup Idea:

Bearish Reversal Setup

• Entry: Consider short positions near 158.500–160.000, following confirmation (e.g., bearish candlestick patterns or BOS on lower timeframes).
• Stop Loss: Place stops above 161.000 to account for potential wicks.
• Take Profit 1: Target 150.000 for initial support.
• Take Profit 2: Target 144.000–142.000, aligning with the demand zone and SSL clearance.
• Risk-to-Reward (R:R): Aim for an R:R of at least 1:3.

Alternative Bullish Scenario:

If the price invalidates the supply zone and breaks above 161.000 with strong momentum, the next target lies around 164.000, extending the bullish run.

Introductory Note:

The USD/JPY pair remains sensitive to both risk sentiment and monetary policy divergence between the Federal Reserve and the Bank of Japan. With year-end liquidity and macroeconomic developments in focus, traders should use additional confluences, such as lower timeframe confirmations and volume analysis, before execution.