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The USDJPY is moving as anticipated after closing below 103.60 last week.
I first mentioned the late 2012 trend line on December 9th.
Here it is again in case you missed it:
In that post, I said that a weekly close below 103.60 would be significant.
Here’s what I wrote:
If USDJPY does close a week below that support area, we may finally see the market trend toward the 101.00 support level.
The 101.00 level has been critical since 2013.
Then, on December 15th, USDJPY retested the trend line near 103.60 again and reacted with a bullish pin bar.
However, as Daily Price Action members know, I was never interested in buying the pair.
The December 14th bullish pin bar indicated that 103.60 was indeed a significant support level.
And if it’s a key support level, I knew a weekly close below it would bring out the USDJPY bears.
We got that weekly close below 103.60 last week, as I pointed out on Friday and again in Saturday’s forex forecast.
Notice how Monday’s session retested 103.60 as new resistance.
That retest ended with a bearish rejection candle on the daily time frame.
A rejection candle like this is very similar to a pin bar; the implications are the same.
As long as USDJPY remains below 103.60 on a daily closing basis, I like the pair lower to 101.00.
Remember that I use five-day charts provided by Blueberry Markets.
That means every daily candle opens and closes at 5 pm EST.
Only a weekly close back above the 103.60 area would negate my bearish outlook for USDJPY.
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