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USDJPY: Keep This 3,000 Pip Wedge on Your Radar

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The USDJPY continues to move sideways between 107.30 and 108.00.

I’ve discussed the key levels I’m watching here several times, one of which is 107.80.

Buyers have managed to take USDJPY above 107.80 intraday. However, we’ve yet to see a daily close above that level.

We saw this happen on Tuesday when the market reached a high of 107.92 before selling off into the close.

This tells me that USDJPY needs to close above the 107.80 to 108.00 area if it intends to reach the 109.00 resistance area.

And if you’re a bear, sellers need to take out 107.30 and 106.90 to take prices down to key support at 106.00.

But everything that occurs between 106.00 and 109.00 is trivial, in my opinion.

What matters for USDJPY over the next few months is which way this monthly wedge pattern breaks:

USDJPY wedge pattern on the monthly chart
USDJPY monthly time frame

I’ve discussed this pattern several times in recent weeks.

The height of that pattern alone suggests a 3,000 pip move is coming for the USDJPY.

And because this is a terminal pattern, we know that USDJPY must break out of it by October at the latest.

That’s when wedge support and resistance converge.

My guess is we won’t have to wait nearly that long.

Of course, the question everyone wants to know is, which way will it go?

Nobody knows the answer as it depends on the first monthly close above wedge resistance or below support.

That said, I still think there is a strong chance the wedge above is a continuation pattern following the 2012 to 2015 rally.

As always, time will tell.

Disclaimer: I hold a USDJPY long position from 106.60.

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USDJPY key levels on the intraday charts
USDJPY 4-hour time frame

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15 comments
Justin Bennett says

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Anonymous says

In my Opinion that should be could a bullish Pennant which could Lead to a Break Upwards, but who knows what’s gonna happen… :-*

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    Justin Bennett says

    That’s my thesis. We’ll see what the market thinks.

    Reply
    Thaddeus says

    I’m inclined to believe a bullish move is most likely too. 129.987 Missed 2002-05 Monthly Pivot (below Monthly 1.18 Extension) is the first target I would be eyeing. the 156.926 Monthly 1.618 takes us into new highs. Current high for the pair is 147.660 set back in 1998.

    Reply
      Justin Bennett says

      147.00 isn’t the pair’s all-time high. That might be all the data your broker has, but the USDJPY began trading in the early 1970s when prices were just above 300.

      Reply
William A. Henslee says

World economy is broken with the US Dollar more likely to come out in strong position than any other. My feeling is that the next range of the USD/JPY will be between 109 and 111. The pair seems to work more off a 200 pip range than a sustained rise or drop.

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    James says

    Look at the history of what happened during the aftermath of the GFC. Where did the USDJPY end up?

    Reply
James says

Hi Justin, I agree that we are due for a sizable move from my analysis you should be looking short not long. This should be a bear flag and has already broken below the wedge on my MT4 charts at least. I will be looking to short in the very near future. Please don’t email me marketing material or offers to the email provided as I don’t wish to be bombarded with emails. Good luck and thanks

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    Justin Bennett says

    If that’s your thesis, go with it, and I’ll go with mine.

    You won’t receive emails from me unless you sign up for them.

    Reply
Emmanuel says

Thanks so much Mr Justin for your wonderful analysis and update, I really appreciate all your analysis, thanks a lot.

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    Justin Bennett says

    You’re very welcome.

    Reply
ali says

Thanks for the update sir justin.

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ziyad fairooz says

Dear Mr Justine,

How much on average profit can make by joining to your trade signal per month

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    Justin Bennett says

    I don’t give signals. Never have.

    Reply
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