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USDJPY: Relief Rally or Something More?

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Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.

The USDJPY is rebounding this week from the 105.00 support area.

I wrote about the potential for a bounce from here in Sunday’s forecast.

There is a descending channel that extends from the March low and April high. You can see how the pair encountered buyers here on the 6th and 7th.

For this reason alone, I was not interested in shorting USDJPY.

In fact, I haven’t been interested in buying or selling the pair. I felt that the market needed more time to figure out where it wants to go.

But just because USDJPY caught a bid at 105.00 doesn’t mean it’s time to buy, at least not for me.

Notice how that 106.80 region has attracted sellers on the last few attempts.

That isn’t surprising given that 106.80 was the June 25th low. As we know, former support becomes new resistance.

Until USDJPY climbs back above 106.80 on a daily closing basis (using a New York close chart), buyers are going to continue to struggle.

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I also won’t entertain a long until I see a close above 106.80.

At the same time, shorts are unfavorable at the moment.

Tuesday’s 160-pip rally is not something I want to sell into, and 105.00 support is too close to the current price to secure a favorable risk to reward ratio.

Furthermore, a close back above 106.80 could take USDJPY back to channel resistance at or above 108.00, so there’s no need to rush an entry.

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USDJPY descending channel

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12 comments
Justin Bennett says

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    Chris Fogg says

    Please please please! findout how to take me off your mailing list!!!!!!!! My email is **edited**. YOu have no unsubscribe feature. I’m going crazy with all the emails.

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      Justin Bennett says

      Chris, you are not on my email list. You are probably receiving push notifications or something similar. Every means of communication I use has a way to unsubscribe.

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OBIOMA says

I have been following your articles, they are concise and precise.

Exactly on point.

How can I have access to free trade charts

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Jane Karimi says

Hi Justin
Was wondering where USDJPY was going and whether to buy but you have answered my question. Thank you

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    Jane Karimi says

    I had thought of buying when it made a pin bar on support at 105.40 but decided to be patient a little.

    Reply
      Justin Bennett says

      Probably a good idea. Thanks for commenting.

      Reply
    Justin Bennett says

    You’re welcome. It’s best to stand aside for now in my opinion.

    Reply
Ali says

Thanks justin sir.

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    Justin Bennett says

    You’re welcome.

    Reply
Ean says

Hi.. EURUSD is below 1.1111, is this mean it will move lower for next week?

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