In Saturday’s forex forecast video, I mentioned a multi-year breakdown for USDJPY.
The chart pattern in question is one that I’ve been writing about since April.
As you can see from the chart below, USDJPY has been trading within this terminal pattern for the last five years.
However, the tricky part about trading this structure is that the daily and weekly time frames did not respect it.
That left me with the monthly time frame, which brings us to July’s close.
If you saw last weekend’s forecast video, you know that July was the first month to close beyond the wedge pattern.
Because July closed below support, it meant that the 106.00 area was likely to attract sellers this week.
I even said on Saturday to watch 106.00 this week for selling pressure.
That’s where we saw USDJPY rotate lower on Monday.
There are no guarantees, but as long as the 106.00 area holds as resistance, I like the idea of a lower USDJPY toward the next key support at 101.00.
But there are no guarantees.
I also won’t be trading USDJPY as I believe EURUSD and NZDUSD to be better vehicles to take advantage of US dollar weakness.
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