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USDJPY Breaks 111.90 Resistance, Targets 113.15

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Two days ago we discussed the USDJPY. At the time the pair was trading at 111.52 and the Fed rate decision was less than 24 hours away.

With an increase in volatility just around the corner, I opted for the sideline. I figured the U.S. dollar stood a good chance of gaining given the recent momentum, but I didn’t want to chance it.

The idea was to watch for a daily close (5 pm EST) above 111.90 resistance or back below 110.90 support. By the time Wednesday’s session closed, the USDJPY had made its decision.

The 112.17 close put the pair 27 pips above our key level. However, something had also occurred that left me waiting once more. Two things, in fact.

We often talk about retracements to new support or resistance. Whenever a market breaks through a key level, I like to wait for a retest of that area as new support or resistance. In the case of the USDJPY, it would be a retest of 111.90 as new support.

These pullbacks help to “reset” the momentum. It’s a cycle whereby some market participants book profits and others step up with new capital to buy the dip or sell the rip.

Proper timing requires patience. It’s the reason this group of traders is often referred to as smart money.

That’s a bit of a misnomer in my opinion. While it may be true that these traders have more experience than many, most aren’t overly intelligent.

What they do possess is patience and lots of it.

I bring this up because I received several questions yesterday about whether or not I was buying the USDJPY. Questions like this usually stem from a fear of missing out or FOMO as some like to call it.

Will I buy? Maybe, but not at current levels (112.22).

First off, we haven’t had a retest of 111.90 as new support. Second, the 10 and 20 EMAs are lagging below today’s price by 160 pips. That leads me to believe that a pullback or at least some sideways consolidation is likely over the coming sessions.

Even if we do get a retest, I won’t act right away. Instead, I’ll sit back and watch to see how USDJPY bulls handle themselves in the 111.90 region. If bullish price action develops and the 10 and 20 EMA tell me that the price has reset, then I’ll consider an entry.

If I miss the opportunity to get long, so be it. There will always be more opportunities tomorrow. I would always rather miss an entry than get stuck on the wrong side of the market.

The next key resistance comes in at 113.15 followed by the May and July highs at 114.35. Alternatively, a daily close back below the 111.90 handle would negate the bullish outlook and re-expose the 110.90 area.

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USDJPY technical break on the daily time frame

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14 comments
Comfort says

Hi Justin

I would like to know how to install the EMA on a tablet using android

Reply
    Justin Bennett says

    It depends on the trading platform. You should check with your broker.

    Reply
Bongani says

Fantastic Justin, your trading style gives more self controI in emotion s, I like it this what makes a good trader to allow the market to decide for and your entry will spot on and no panic as you got all time watch,

Thank very much and I am looking forward to be one of your member

Reply
    Justin Bennett says

    You’re welcome. I look forward to seeing you on the inside.

    Reply
Howard says

It’s very helpful to me to watch your approach on this 1. Giving space for news. Updating levels above and below current price, and price’s relationship to the 10/20 ma area. Stalking with lots of patience. Thank you Justin.

Reply
    Justin Bennett says

    Cheers, Howard. That’s all I do each and every time. You won’t always get an entry, but you don’t need to catch every move. Far from it.

    Reply
Jared says

Hi Justin
What’s the difference between a breakout and a technical break?

Reply
    Justin Bennett says

    There’s no difference. I use technical break and breakout interchangeably.

    Reply
Ismo says

Am always looking forward to your analysis. You are shaping the way I trade these days. My confidence is getting stronger and am making profit with your teachings.

Reply
    Justin Bennett says

    That’s great to hear, Ismo. Let me know if you have any questions.

    Reply
Michael says

Hi Justin. Thanks for all your wonderful writeups. Happy to have discovered you. With your wealth of experience, how come you never talk about come you never talk about commodities such as gold & oil which are also heavily traded.

Reply
    Justin Bennett says

    Hi Michael, pleased to hear you’re enjoying the content.

    Mostly because I live in the US where gaining access to those markets isn’t easy. That said, I get plenty of setups with the pairs I trade.

    Reply
Nikolay says

Hi, Justin. Thanks for very useful content. Concerning USDJPY potential long shouldn’t we take into account the resistance line that goes from 2016 December high? 111.90 retest seems to be formed just after interaction with this particular resistance. Sorry for my bad english.

Reply
Khurram says

Good day!
Would it be more convenient for traders/new learners if you also suggest best range to Buy & Sell along with TP and SL figures in your every post ?
Really appreciate your work.

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