USD/JPY path of least resistance is down on NFP day

May 03,2019 01:12   Source:Forex Crunch

USD/JPY is trading around 111.50 as tension mounts ahead of the all-important Non-Farm Payrolls report. How is the pair positioned? Resistance is far more significant than support.

The Technical Confluences Indicator shows that the currency pair faces an immediate cap at 111.54 where we see a dense cluster of lines including the Simple Moving Average 5-15m, the SMA 10-15m, the SMA 50-15m, the SMA 5-4h, the Bollinger Band 1h-Middle, the SMA 100-15m, the SMA 5-1d, the BB 15min-Upper, and additional lines.

The next minefield is quite close. USD/JPY faces another substantial hurdle at 111.84 where we see the convergence of the Fibonacci 38.2% one-month, the Fibonacci 38.2% one-month, the Pivot Point one-day R1, the SMA 10-1d, and more.

Looking down, dollar/yen has quite a few support lines ready to absorb it but these are all spread out until we note a cluster of levels that stands on its own at 111.12 where we see the Bollinger Band one-day Lower, the Fibonacci 161.8% one-day, the PP 1w-S1, and the PP 1d-S2 meet.

The next cushion is at 110.66 where the PP 1m-S1, the SMA 100-1d, and the previous monthly low all converge.

Here is how it looks on the tool:

USD JPY technical analysis confluence detector May 3 2019

Confluence Detector

The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.

This tool assigns a certain amount of “weight” to each indicator, and this “weight” can influence adjacents price levels. These weightings mean that one price level without any indicator or moving average but under the influence of two “strongly weighted” levels accumulate more resistance than their neighbors. In these cases, the tool signals resistance in apparently empty areas.

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