The USDJPY chart is definitely bullish. The daily timeframe is trending up, creating new demand imbalances and respecting them. The bigger picture bias for the USDJPY Forex cross pair is bullish, with the USD potentially becoming stronger, as explained in a previous Dollar Index DXY chart analysis.
Why is USDJPY rallying so strongly? The bigger picture bias is bullish, as simple as that. There is a bigger timeframe demand imbalance that has taken control.
As you can see on the USDJPY tradingview daily chart below. New demand levels are being created for this cross para. The price level tagged with #1 didn’t play out as we expected; you can read the previous USDJPY chart analysis here. We can’t pretend to be right on every single trade. There is not a single Forex trading strategy that will offer 100% winners; it’s just impossible. Supply and demand are not an exception. Supply and demand is not an exception. Fortunately, money management and our edge will provide us with many more options to trade, not only Forex but also stocks.
Fortunately, a brand new imbalance created at the price level marked as #2 has played out nicely. There is a brand new imbalance slightly higher at #3 that could be another option to buy a USDJPY Forex cross pair.
Shorts? No way! It’s not possible to think of shorts on USDJPY daily chart right now, even on smaller timeframes for that trading intraday strategies and shorter-term periods.
This is the kind of price action technical analysis you will learn in our trading community. You will learn how to locate new supply and demand imbalances and trade without using any indicators, no news, no fundamental analysis, no earnings announcements, no volume or VSA analysis. Just supply and demand imbalances.
Trading supply and demand imbalances are ideal for beginners and those with a full or half time job, you won’t need to stay in front of the computer all day long trying to move price action with your mind.
As supply and demand traders, we do not need to pay attention to the news, fundamentals or any earnings reports. Once a big timeframe imbalance has gained control, earnings do just the opposite and react strongly to those imbalances. Why do you see positive earnings and then the underlying stock drops like a rock? Or a negative earnings announcement and the stock rallies like a rocket out of control? You are probably missing the fact that there are big imbalances in gaining control.
You should not worry about fundamentals or earnings announcements unless you are doing very short-term trading and scalping.
You can use these imbalances to plan your trades in lower timeframes. Trading is just waiting for the right trigger points and scenarios to present themselves. This game has got a name and it’s called the waiting game. We need to wait for the correct scenarios and setups to happen patiently. And wait for the price to pull back or dip into the price levels we want to trade, in our case. These price levels are made of supply and demand imbalances.
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