The USDJPY is above the key area I mentioned last Thursday.
I also commented on how a close above the 109.50 to 109.70 region would be bullish in Saturday’s Forex Forecast video.
Here’s the USDJPY segment of Saturday’s forecast:
And if you watched last Thursday’s video, you know that I was favoring a move higher following the recent false break below 108.40.
Here’s what I said in Thursday’s video:
Ideally, given this recent false break of support, I would like to see the USDJPY close above this area (109.50/70), and continue higher next week.
Monday’s 109.93 close has given us just that.
Going forward, I want to see USDJPY bulls defend that 109.50 to 109.70 area as new support.
It just so happens that 109.70 is spot on with the 50% retracement of Monday’s range.
Does that mean the USDJPY will bounce from 109.70?
No, there are never any guarantees in this business.
The best we can do is to identify what is likely given the price action in front of us.
With that in mind, I think a move higher from the USDJPY is likely while the pair is above 109.50/70 on a daily closing basis.
And as I mentioned last week and again on Saturday, the next key resistance level comes in around 111.10.
That’s the location of an open gap from May of last year.
Alternatively, a daily close back below the November 2018 trend line would negate the bullish outlook and re-expose 108.40.