I posted the other day about USDJPY flirting with disaster. Of course whether it’s actually a “disaster” really depends on which side you’re on when the time comes 😉
Regardless of whether you’re a USDJPY bull or bear, there’s a question that I think we can all agree is common ground – how important is the bottom of that wedge on the daily chart?
How about a level that goes back 20 years? That “0” isn’t a typo. The 101.50 level has been playing an important role since 1994! In addition to the monthly chart below, I’ve also included a daily chart at the bottom of this post to illustrate where the two lines intersect.
Just to be clear, this isn’t to say that the USDJPY will break down from here. I would never make that assumption, especially without some price action confluence to back it up. The 101.50 level is still holding as of yesterday’s close, so there’s always the chance that the pair rebounds from here.
Having said that, if I had to pick a directional bias I’d be bearish. The simple fact that price action has been hugging the bottom of the wedge on the daily chart leads me to be more bearish than bullish.
I’m on the sidelines until a clear price action setup presents itself.
Click the image to expand.
USDJPY daily chart. Notice where the monthly level lines up with the bottom of this wedge…
What do you guys think? Is it just coincidence or is the market telling us something?