[thrive_custom_box title=”” style=”dark” type=”color” color=”#fef5c4″ border=”fadf98″]
Important: I use New York close charts. Click Here to Use My Preferred Broker
[/thrive_custom_box]
The USDJPY is plummeting today following another round of safe haven bids. This is something I’ve been discussing for weeks with regard to pairs like the EURJPY and GBPJPY.
Another yen cross we looked at just last week was the AUDJPY. For those who kept track, you know that the pair just retested and sold off from the 85.40 resistance area that I mentioned on Friday.
So how about the USDJPY?
Until today’s price action, the pair has been a laggard among yen pairs. The U.S. dollar caught a bid last week which helped to even the playing field against a surging Japanese yen.
However, that dynamic appears to be shifting, and today’s selloff in the USDJPY is more significant than you may realize.
Here’s why:
Today’s low of 107.40 tested wedge support that extends from the September 2012 low. As of now, that level comes in at 107.50 hence the reason we see some bullish 1-hour candles in this region.
To be clear, I have no interest in buying the USDJPY. Just like the EURJPY, GBPJPY, AUDJPY, and others, I’m only interested in shorting these pairs. In other words, buying the Japanese yen.
Because the USDJPY is sitting on trend line support as I type this, there is no short opportunity just yet in my opinion. It’s going to take a daily close (New York 5 pm EST) below 107.50 to initiate a short.
That said, it would be prudent to also wait for a close below 107.30 which is the 2017 low. Such a break would expose much lower levels including 105.50 and perhaps 103.70.
As for data points to keep an eye on, Wednesday’s U.S. CPI reading at 8:30 am EST promises to shake things up. It’s going to be a closely watched and highly influential figure given what’s happening with risk assets of late.
[thrive_custom_box title=”” style=”dark” type=”color” color=”#fef5c4″ border=”fadf98″]
Free Webinar: Learn how I trade pin bars, draw key levels, and much more!
[/thrive_custom_box]
