The USDJPY broke a significant pattern at the end of July.
Significant is probably an understatement.
I’ve discussed this monthly wedge pattern since May, maybe earlier.
Notice how USDJPY has held below the 106.00 area on a monthly closing basis since July.
I’ve liked the idea of a lower USDJPY since then.
However, the tricky part was timing a short entry.
While you could’ve looked for entries at swing highs, an alternative was to watch for a breakdown of the March trend line.
I mentioned this idea on September 7th.
As you can see from the daily chart below, USDJPY is about to break the March trend line.
Just keep in mind that 104.60 could attract buyers.
That’s the location of several swing lows, including the one from March 2018 and August 2019.
A daily close below that should open the door to the 101.00 support level we’ve been eyeing since the July close.
Any bounce from the 104.60 area may be temporary.
Per the monthly chart above, as long as the pair remains below the 106.00 region on a monthly closing basis, I will stay bearish the USDJPY.
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