USDJPY: 134.40 Holds the Key to the Next 360-Pip Move

·    February 17, 2023

·      February 17, 2023

·    February 17, 2023

USDJPY has followed through beautifully from the February 3rd bullish breakout.

I covered this descending channel and the resulting breakout several times, and USDJPY hasn’t disappointed.

We even saw bulls secure a close above 132.90 on Tuesday, which opened up the next key resistance at 134.40.

That 132.90 level should be familiar to those who watched last week’s forecast as it’s the level bulls had to break to continue the rally.

Now USDJPY bulls are faced with a new test at 134.40.

The area has been a pivot for the pair since December, acting as support until the December 20th breakdown, flipping 134.40 to resistance.

We’ve seen USDJPY test this level for the last three sessions, including today’s brief spike above it.

But as many of you know, a daily close (using New York close charts) above 134.40 is needed to confirm the breakout.

A daily close above 134.40 opens up the next key resistance at 138.00, offering another 360 pips of bullish potential.

If we see today close below 134.40, the level remains as resistance for next week.

Remember, too, that Friday breaks can be deceiving, given the lack of volume.

So if USDJPY does close above 134.40 today, it wouldn’t be a bad idea to wait for Monday’s close to confirm the breakout.

USDJPY daily 2.17.23 1
USDJPY: 134.40 Holds the Key to the Next 360-Pip Move 2

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    1. Hey I’d like to ask some questions on telegram but I can’t, please make an option on how we can inbox you on Telegram,Thank you

  1. There are a number of factors which may
    drive USD lower through 2023. First the US
    is expected to enter into recession, at a time
    where Europe may be recovering and China
    expected to have exited from ZC policy. USD
    performance is likely to be much more
    subdued (and mostly negative) in a US only
    recession. Second, when global leading
    indicators (ex US) turn higher, there is
    meaningful USD depreciation over the
    following 12 months. There is likely to be
    greater volatility in rates and FX over the
    current quarter that sees in DXY in a 100-
    108.00 range. For H2’2023 however DXY
    may be back to 95.00-96.00.

    Currently (as of Jan):
    • DXY: 0 3m: 106.66
    • DXY: 6 12m: 96.87
    • DXY: LT: 96.61
    • 6-12mths: Bearish DXY

    Anything sub 125.00 may present an
    opportunity to buy USDJPY short term.
    H2’23 though may see more sustained gains
    in JPY to 110-115 may Fed pivot toward rate

    Currently (as of Jan):
    • USDJPY: 0 – 3mths: 134.0
    • USDJPY: 6 – 12mths: 120.0
    • USDJPY: LT: 130.0
    • 6-12mths: bullish JPY vs USD,
    moderately bullish vs EUR

    SOURCE: citibank

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