USDJPY Nears Breakout Territory

Today I’m going to show you exactly how I’m trading USDJPY based on the liquidity that was left behind in 2022.

I’ll share some key levels to watch, as well as a channel that points to a possible 400-pip rally.

Lastly, I’ll provide an update on the US Dollar Index, the DXY.

Watch the video below and scroll down for the annotated charts and analysis.

Like many markets, USDJPY has been mostly idle in October.

Apart from the October 3rd liquidity grab, USDJPY has spent this month in a 180-pip range.

We can also see that the uptrend that began in July is very much intact.

In situations like this, it’s usually best practice to look for entries with the trend.

That’s especially true when we look at the price action from last October.

As discussed in today’s video (above), the October 21, 2022 wick has yet to be filled.

Large candles and wicks like that leave a considerable amount of liquidity behind, which tend to serve as magnets for price.

If that’s the case here, we could see USDJPY push higher into the 151 to 152 region.

I would expect significant selling pressure from there, although we could see the pair extend even higher based on the ascending channel from March.

The top of that channel could be as high as 154.00 later this year, but first, USDJPY needs to clear the 150.00 resistance area.

Do that, and I think we see this rally extend toward 151-152.

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