Good day forex traders, We hope you are having a nice trading day. This is our algorithmic analysis on USDJPY. Here we are doing a multi timeframe analysis on USDJPY pairs. We have taken into account other variables like DXY and the yield spreads but we have not included that in this presentation.

Here is the monthly chart of USDJPY. We have marked the Fair Value Gaps as FVG in the shaded areas. These are drawn from the imbalances formed in the candlesticks. From an algorithmic standpoint these represent areas of support and resistance and also as draws on liquidity. In order to seek orders, the algorithm seeks to come to these FVG.

We see a big move down followed by a retracement. During this retracement, a FVG was formed. This has been outlined and when price trades above this FVG, this FVG starts to act as a support. Price initially trades back into the FVG and forms a higher high. Price then retraces back into the FVG and takes out the liquidity of the previous low and immediately moves higher and closes above the FVG. See the bodies close above the FVG. During this down move, the price forms another FVG. This has been outlined by the shaded area. Price then moves higher and closes above the FVG. Now this FVG should act as support. See the bodies have not closed inside the FVG yet. This suggests that currently this FVG is acting as support. So from an algorithmic point of view, we would be bullish on USDJPY on a monthly basis as long as price does not close below this zone.

The above is the line chart of the USDJPY monthly. You might wonder why we have included this chart. We want to highlight the higher lows formed on the line chart even though on the candle stick chart showed a lower low being formed in the FVG. Also see how price has found support on this fvg. The monthly chart gives us the broadest context and we have to have positive bias on usdjpy and not pick the top and continue to look for longs as long as price is above the monthly FVG.

Here is the weekly chart. This should be our focus on each weeks analysis. This should be a short term traders longer perspective. We have made a swing low and again the bodies have respected the monthly FVG which is bullish. We are currently on a weekly FVG. we need to see price action here to see if we reject here. But we also should remember that we are in the month of december. we are likely to have consolidation. But we are closely watching the last weekly swing low. We do not want price to go below this low for continued bullishness. So for short term trading perspective, we keep a bullish view as long as price does not go below the current swing low.

The above is the usdjpy 4 hour chart. Here it looks like we may be in a Market Maker buy model. There are plenty of youtube videos on market maker models. Here we have an original consolidation followed by a down move. Price then has an upmove to take out the liquidity above the consolidation. However we will be much more confident of this analysis if price closes above the daily FVG that we have marked. So lets keep a close eye on this FVG. We hope that this was insightful

USDJPY ALGORITHMIC ANALYSIS- 10/12/2024

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