- USD/JPY is under pressure in an uptrend.
- The bears need a break from the hourly structure, but the bulls are still in control.
The USD/JPY is under pressure in the latter part of the North American session and there are a couple of scenarios identified according to the structure of the market on the hourly time frames:
USD/JPY H1 Bullish Scenario
Price is in an uptrend, but the formation of the W in a reversal pattern would be expected to draw price towards the neckline and trendline support, as illustrated above.
There are two hourly price imbalance (PI) zones above and below the current market and it is all about knowing which zone will mitigate first. In a bullish scenario, the price could move lower to collect liquidity from the price imbalance to cover buy orders, leading to a further rally and possible continuation to the upside.
USD/JPY H1 Bearish Scenario
In a bearish scenario, price could move higher to fill sell orders, which could lead to a rally lower for a test of support. If offers outperform offers at that juncture, then a continuation lower could evolve into a breakout of the structure.
Source: Fx Street
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