Will the Japanese yen offer the biggest opportunity next year?
The chart suggests it’s more than possible, especially if this one level breaks in the coming weeks.
We’ll discuss that level in detail in today’s video, including what it could mean for pairs like USDJPY.
Watch the video below and scroll down for the annotated charts and analysis.
The Japanese yen (JPY) was in a freefall for the majority of 2023.
However, that changed abruptly following the retest of the 2022 low.
We discussed that retest on this site, and I even said that traders should anticipate yen strength starting in mid-November.
Since that time, pairs like USDJPY have cratered over 1,000 pips.
But the even bigger opportunity has yet to materialize, in my opinion.
There’s a descending trend line from September 2021 on the Japanese yen futures chart that will likely dictate the yen’s direction in 2024.
We saw a rejection from this level on December 15th, hence the relief rally from the yen pairs.
This level was discussed with VIP members at the time, so everyone was well aware that the yen would likely weaken following that retest.
The JPY remains below that trend line, so there’s no confirmed break just yet.
However, a sustained break above it in 2024 could lead to additional yen strength toward the mid-range, also near the July 2023 high.
But the bigger opportunity would be a push to the macro range highs, also the 2023 high.
That could send pairs like USDJPY back to its 127.00 lows.
Alternatively, if yen futures fail to break that 2021 trend line and instead drop back below the June 2023 low, it would signal yen weakness back to its 2022 and 2023 lows.
Regardless of what we get in 2024, these levels are ones to watch if you’re trading the yen.
Happy holidays and blessings to all!
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