The USDJPY has reached a key resistance area between 111.40 and 111.70. In fact, as I type this, the pair is above the 111.70 figure on an intraday basis.
I mentioned the likelihood of a move to this resistance area on February 13th.
However, I don’t pay attention to intraday moves. Said differently, anything before the 5 pm EST close is insignificant from my perspective.
That’s why I’m always stressing the importance of proper New York close charts where each 24-hour session ends at 5 pm EST.
Until I see USDJPY close today above this 111.40/70 area, today’s move is conditional.
It also means this region is still serving as resistance as far as I’m concerned.
Now, that does not mean USDJPY won’t close above 111.70 today.
But it does mean this rally is contingent on the market’s ability to clear 111.70 on a daily closing basis.
If it can’t and today’s price action carves a bearish candlestick of sorts, we could see USDJPY trend lower next week.
A decline would likely encounter support just above the 110.00 handle.
The alternative would be a daily and weekly close above that upper resistance level of 111.70. Such a close would expose the next key resistance at 112.50.
I’m staying neutral here until I see where USDJPY closes today’s session.
That said, I do have my reasons to suspect an imminent decline.