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On May 11th, I wrote about a falling wedge on the USDJPY.
Last Monday’s close above wedge resistance was indicative of strength as the latest round of consolidation ended.
However, here we are five sessions later, and not much has changed.
The USDJPY continues to struggle to determine what role it wants to play in the current market.
That said, the pair is holding above 106.90.
You can see where 106.90 served as support twice in April.
In fact, the 106.90 area has been a factor since June of last year. It was even a level we played last August.
Members of Daily Price Action know that I was buying USDJPY earlier this month with a 106.51 average in anticipation of a break higher.
I want to see buyers extend gains above the recent high at 107.80 before I commit to adding another block.
If they can do that and take out the 108.00 area, there isn’t much to prevent a run at the 109.30 level.
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Alternatively, a close below 106.90 would be a sign of weakness.
Don’t forget too that USDJPY is still consolidating within a multi-year wedge pattern.
That’s the more appealing play here, in my opinion.
Wedge support comes in around the 106.00 handle with resistance coming in near 109.00.
But as I’ve stated for weeks now, it’s probably going to take a monthly close beyond the wedge pattern above to confirm the breakout.
Until that time, expect more indecision from the USDJPY.