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USDJPY to Resume Uptrend Following Breakout?

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The USDJPY is on the move again.

After months of consolidating, the risk-sensitive pair ripped 250 pips higher this week.

Most of those gains occurred on Wednesday when the pair closed higher by 150 pips, clearing that May 6, 2019 gap at 111.10.

I wrote about this level several weeks ago.

It’s no coincidence that Thursday’s session carved a low of 111.11 before rocketing higher by another 100+ pips.

But instead of talking about trivial details, I want to take a step back today and look at the bigger picture.

I also have no interest in discussing why the Japanese yen did what it did.

The price action is all that matters. It’s the only thing that determines whether an event or outcome is positive or negative for a currency.

Everything else is just noise, in my opinion.

With that in mind, here’s what USDJPY did this past week:

USDJPY multi-year wedge pattern

That’s the monthly time frame, but this wedge has been holding up on a weekly closing basis as well.

Like it or not, the risk-sensitive pair is in the process of clearing the top of a wedge pattern that has been around since 2015.

Of course, we didn’t know this was a wedge until much later than that.

But unless this turns out to be a false break, this week’s rally is a significant moment for the USDJPY.

It could very well re-establish the uptrend we saw between 2012 and 2015.

Now, as for key levels to watch for next week, a lot of it will come down to today’s close.

As long as USDJPY can stay above 111.10, that’s the first key support for next week, in my opinion.

We could also see a retest of the wedge top as new support, but that would result in a much deeper retracement.

As for key resistance, this week’s high at 112.25 is one to watch, as well as 113.25 and the previous range top at 114.50.

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USDJPY key support and resistance on the daily time frame

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19 comments
Justin Bennett says

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Kafando Stanislass says

très clair. merci

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Shaibu Ibrahim says

You are a great mentor

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Samuel says

Good idea on USDJPY, but please what is your thought on USDCHF doing the opposite?
I saw this trend line, trace back from 2015.01.11 on the weekly chart and currently it serve as resistance. Thanks

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    Justin Bennett says

    I don’t have much of an opinion on USDCHF at the moment.

    Reply
    Sifiso says

    Hi Samuel. Sorry to budge mate. The smart money seems to be pushing the dollar high this quarter. For the year that could be a false move before we reverse and trend down. However if you consider that the longer picture is in a consolidation then you can expect the usdchf to rise until the higher boundary of the monthly chart channel. And remember it’s a new decade, so one needs to really consider the long term view in the markets as a decade is a significant period for investors(long term traders). And also do not forget that most of them are those who control price.

    Reply
Welcome Simelane says

I have been reading your analysis of Forex above and lm interested in becoming one of your students because l want to trade but lm still the beginner.

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Sifiso says

Hi Justin! Thank you for sharing such wonderful insight on the dollaryen, especially the long term view. However I feel that what you share here with us is really incomplete therefore not tradable. I mean you don’t share entries and exits. Hence we never know your risk to reward ratios and we never know how u managed those trades.

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    Justin Bennett says

    Sifiso, sorry you feel that way. However, this is not a signal service. These are my ideas only. I haven’t shared my entry because I haven’t taken a position yet. But if I do, I’ll only share it in the member’s area here: https://swingtrading.dailypriceaction.com/lifetime-membership.

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      Sifiso says

      Thanks for the clarity Justin.

      Reply
schalk pelzer says

it also look like a Inside bar forming on the daily time frame…

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    Justin Bennett says

    We’ll see how next week plays out.

    Reply
Donald Osemeke says

I have seen your great works here, I will definitely join the group. I need time to do the needful.
Tjanks.

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    Justin Bennett says

    Cheers. I look forward to seeing you there.

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      Sifiso says

      I have also looked carefully at the dollaryen long term view and I’m am of the opinion that it has been ranging between 106 and 115 since 2016. Seeing that the dollar is heading higher this quarter, it would not be surprising to see it touch 115 once again before mid April 2020.

      Reply
AYEBARE YAHAB says

Thanks Justin for your generous support.Do I need to always wait for a retest of support and (or) resistance to execute a trade?Am in Uganda.

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ali says

Thanks sir justin for update and excellent analysis.

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