Daily Price Action
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USDJPY: More Patience Required

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For the last few weeks, we’ve been watching how USDJPY reacts to 109.80 resistance.

It’s the August 2018 low as well as the inception point for the wedge pattern that broke down in December.

The 109.80 level is also very near the 50% retracement of the range from the 2018 high and the year-to-date low.

USDJPY carved a bearish rejection candle on the 23rd and again on the 25th.

However, both patterns occurred following several days of sideways price action. That isn’t what you want to see as a potential seller.

The fact that USDJPY is hovering just below 109.80 is suggestive of indecision between buyers and sellers.

In other words, it’s a stalemate.

This isn’t a huge surprise though. January is usually one of the slowest months of the year if not the slowest.

As you can see from the chart below, USDJPY is also carving a short-term ascending channel. It’s similar to the CADJPY pattern I discussed yesterday.

Channel support appears to have attracted buyers yesterday and again today.

As such, a close below this channel support could be an early warning sign for the next leg lower.

Alternatively, a close above 109.80 would expose channel resistance near 111.00.

Remember that I use New York close charts. These charts are required for trading price action.

Click here to get instant access to the same Forex charts I use.

I’ll be watching things from the sideline for now. Given the breakdown and selloff last month, I’m only interested in selling opportunities at the moment.

That could materialize between 111.00 and 111.70 or following a close below channel support near 109.30.

The latter would expose 107.60 and perhaps even the year-to-date low at 105.60.

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USDJPY short-term ascending channel

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12 comments
Dee says

Thank you my leader

Reply
nghia says

cam on

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Ruth says

Thank you sir

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Loko Saror says

thank you sir

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Onuoha says

Thanks Man

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Patrick says

Thank you for your lessons.

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Aaron Mosiapane says

It fell …
Very hard

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Aaron Mosiapane says

Learning a lot from you… Thank you

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mwalker354@gmail.com says

I stayed in both the USDJPY & USDCAD and closed both @ 37 &102 pips respectively this morning.I have missed out making good profit too often of late because of the market conditions.

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Milen Pavlov says

You are the best teacher. Would you explain why you called Wedge pattern with inception point on August low, not Triangle pattern?

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Frano Grgić says

I believe that it will fell more down because to resistance will be hard to broke.

But as You say we need to wait confirmation.

Reply
derrick says

i was totally confused whether to short or long this very pair but thanks so much coz now i know

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