On October 9th, I wrote about how USDJPY would remain bearish below 106.50.
Then on October 14th, I mentioned how the lower highs since February pointed to a retest of 104.20.
The pair was also breaking out of a small rising wedge formation.
Additionally, USDJPY has held below the 106.50 resistance area, which used to be the bottom of a large symmetrical triangle.
Those who have followed me for a while are very familiar with the chart above.
It’s been my guide for the USDJPY since July.
So, now that the pair has reached our first target at 104.20, where to next?
For that, we have to turn back to the monthly time frame above.
One level I’ve had my eye on since July is the 101.00 handle.
Notice how the 101.00 level has served as a pivot for the USDJPY since 2013.
In fact, the level was a critical factor as far back as 1999.
That 101.00 area is my next target, but only if USDJPY sellers can close the pair below the 104.20 region.
It’s going to take a daily close below that area to open the door to 101.00.
Until then, 104.20 is likely to serve as support.
As long as the USDJPY continues to carve lower highs, I like the pair lower toward the 101.00 support level.
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