In this short USDJPY video analysis, we are going to show you what price action areas we expect the price to react from on the USDJPY Forex Cross pair. USDJPY is dropping strongly in reaction to previous weekly supply imbalances in a big-picture downtrend. New supply levels have been created around 114, 112.69 and a brand new one around 111.60. This USDJPY cross-pair analysis is done on the weekly timeframe for those interested in a Forex strategy to help them in their swing trading.
These strong impulses often become times a new imbalance where we can plan our trades based on very specific rules. By reading a series of price action patterns, you will be able to identify certain price areas that become supply and demand imbalances where you will be able to plan your trades. One of the most important characteristics for an impulse to become an imbalance is its strength, as can be seen in the imbalances drawn on the USDJPY Forex cross-pair weekly timeframe. Price action, together with a mechanical supply and demand trading strategy, will help you locate areas of imbalance where new trades can be taken.
USDJPY has fallen short of retracing to the last supply imbalance around 112 but has continued to drop strongly creating another supply level around 111.60. There are many Forex trading strategies that work, you just have to master one of them by trading it over a long period of time until you are number one doing the same boring thing every day. If you start skimming around and jumping between different strategies you will be auto-sabotaging yourself.
Technical analysis, together with price action and supply and demand imbalances, can help you locate price levels where you expect the price to react strongly. You can use many other strategies to plan trades at these imbalances using lower timeframes and even indicators if you use them.
Trading supply and demand imbalances are ideal for beginners and those with full-time or half-time jobs. 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 patiently wait for the correct scenarios and setups to happen and wait for the price to pullback or dip into the price levels we want to trade, in our case these price levels are made of supply and demand imbalances.
There are several ways of buying stocks. When trading stocks, you can buy shares of the underlying stock or use options strategies to go long or short at these specific supply and demand levels, long calls or long puts or spreads. You can even buy a CFD (contracts for difference) if you are in a country where it’s allowed.
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