On April 22nd, I wrote about a potential breakout from the USDJPY.
Since that time, however, the pair hasn’t done much.
It even broke below the 106.90 support level on April 28th.
But as I told Daily Price Action members earlier this week, that 106.90 support level is likely a zone that extends down to 106.70.
I was also never interested in selling USDJPY.
The aggressive rebound in March canceled out any notion that the yen is acting as a safe haven this time around.
At least that’s my view of things.
I explained my reasoning in the April 18th Forex forecast.
Furthermore, the multi-year wedge that developed following the 2012 to 2015 rally appears relatively bullish.
Fast forward to today, and you can see that the USDJPY has broken above trend line resistance from the April high.
This was always the likely outcome; it was only a question of when it would occur.
As long as the USDJPY can stay above that trend line near 107.10/20, I’ll remain bullish.
Expect sellers to congregate around 108.00/30 on the way up.
However, Thursday’s breakout could see the USDJPY retest the 109.30 April high next week.
Just keep in mind that the more significant breakout for USDJPY will materialize with the multi-year wedge pattern above.
That said, there will be short-term opportunities along the way, one of which could materialize with a 4-hour close above 107.20.