On October 7, I wrote about the potential for a 450 pip move from USDJPY.
At the time, the pair was resting above support at 106.80. That was a must-hold level for USDJPY buyers.
Immediately following that post, the pair rallied 40 pips, taking out the October 3 high.
The October 8 session retested the 106.80 support level, but buyers once again defended the area.
Fast forward to today, and the USDJPY is up 170 pips from 106.80.
However, buyers face a crucial test today.
They still need to secure a daily close above the 108.30 area, which is the neckline of this potential inverse head and shoulders pattern.
As I pointed out in the video I just made for Daily Price Action members (they get daily videos), that level could actually be as low as 108.00.
If buyers can close today above 108.00/30, it would mean that any retest of the area next week would likely attract buyers.
It would also expose the next key resistance area at 109.00.
Notice how the 109.00 handle served as support in mid-May before flipping to resistance throughout July.
A close above that would open the door to 110.60.
The measured objective for the pattern comes in just above the 112.15 resistance area.
Just remember that all of the above is contingent on today closing above 108.30; perhaps 108.00 depending on how you draw the neckline).
A failure to do that could keep USDJPY under pressure next week.
Keep in mind too that there are no guarantees.
Even if USDJPY closes above 108.30 today or sometime next week, it does not mean the pair will move higher.
Trading is a game of probabilities, never guarantees.
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