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The aftermath of FOMC leaves the USD rally in tact for now. One pair that we can keep an eye on for continued strength is USDJPY.
I haven’t traded this pair in quite a while as I’ve been waiting for a healthy pullback within the recent 1,600 pip rally that lasted for more than five weeks. The pair has since pulled back 600 pips from the year high, which may have reset this market for further gains.
Prior to yesterday’s event risk, the pair was trading within a descending channel. As we know, a descending channel within an uptrend can be seen as a bullish pattern. USDJPY didn’t disappoint as the pair broke to the upside before the market closed.
Summary: Watch for bullish price action on a possible retest of 117.85. Key resistance comes in at 119.10 and the year high at 121.60.
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