It’s no secret that USDJPY has been in a broader uptrend for quite some time. In fact since 2012 the pair has advanced nearly 5,000 pips.
Of course all good things must come to an end, and trends in the Forex market are certainly no exception. However based on yesterday’s price action it appears that USDJPY may have some gas left in the tank.
The 123.80 level has been a key separator between the bulls and bears since late May. From May 29th through June 9th the level acted as support. Once the market broke to the downside on June 10th the level began acting as resistance, as expected.
If this level is indeed still important, yesterday’s price action appears to make the statement that USDJPY bulls want to push the pair higher at least one more time. However because the close was marginal, I’d like to see bullish price action from the level before consider an entry.
Summary: Watch for bullish price action at 123.80 on the 4 hour or daily time frame. Key resistance comes in at 124.43 and 125.85.