I’ve been wanting to talk about this level on USDJPY for a while now so let’s jump straight into today’s analysis.
The 102.80 area is an area that I’ve been watching, and talking about, for some time now. At last it does appear that the market has broken this level today with a close at 102.90.
Not only is this a key horizontal level, it’s also trend line resistance from late last year. From here I’ll be looking to buy on a pullback to support in the 102.80 area.
The market may run into some resistance around the 104 level, however I do think this market has the 2013 high of 105.40 written all over it. Using a measured objective from the wedge high to the wedge low, we get a long-term objective of 107.30.
Of course I don’t advise holding out for a level this far away as there will be many swing highs and lows in between to re-enter the market.
Summary: Look to enter long at support between 102.70 and 102.80. Confirming price action may not be necessary considering the significance of today’s break, however do keep in mind that a lack of bullish price action leaves a greater chance for a false break.
We’ve been watching EURAUD test this trend line support over the last couple days. I mentioned yesterday that it looked as though the market had broken the level but it wasn’t a very clean break.
Today the market moved lower, closing the day 20 pips lower than yesterday. The break of this level is now confirmed and the market has recently retested former trend line support as new resistance. Unfortunately there wasn’t much in the way of “trade-able” price action during the retest.
Summary: After breaking lower today, I’ll be watching for bearish price action on the 4 hour time frame as confirmation that former trend line support is likely to hold as new resistance. The next key support level doesn’t appear to come in until 1.412.
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