USDJPY is pulling back significantly today following a retest of 160.40 resistance, but will the pair move lower in May or is the bottom in?
Today’s video outlines what I’m watching from USDJPY, including a simple way to trade a break from the current range.
Let’s get to it!
The USDJPY traded to fresh 34-year highs on Monday just as the Bank of Japan (BoJ) intervened, or so we think.
I figured they would hold off until at least USDJPY 155.60, which they did.
If you saw my video a few weeks ago, 160.40 was a key resistance for the pair dating back to the 1990s.
The same goes for the 155.60 handle, which is serving as support this week.
Now that we’ve seen the BoJ step in, some consolidation or even a further pullback for USDJPY seems likely.
However, sellers first have to deal with 155.60 support.
A sustained break below that on the daily time frame would open up the 152.00 multi-year level, which broke earlier this month.
We haven’t seen USJPY test 152.00 as new support, so a pullback wouldn’t be surprising.
Alternatively, a sustained break above 160.40 on the daily chart would open up 164.50, a level also from the 1990s.
Given Monday’s 560-pip range, we could see USDJPY go sideways for a few days as traders digest today’s events.
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