USD/JPY Technical Analysis: Retest of 2015 Highs Ahead
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-USD/JPY Technical Strategy: Price Broke Above Resistance, Breakout Potential Ahead
-Recent USD Strength Could Align With BoJ Action
-Price Is Attempting To Break Above The 200-Day Moving Average Similar To July 2014
As of October 29th, USDJPY is yet to trade above the August 24 high or close below the August 24 close of 118.30. This type of price action often precedes a big move as the best indicator of volatility is inactivity. What could become the question of the year is, what direction will the breakout occur? If price can sustain above the 200-day moving average after breaking aggressively below on August 24, the answer to the prior question may ultimately be higher.
There was short-lived excitement when the key technical support of 118.60 was recently broken on October 15th. However, price did not close below this level, so bearishness was cautioned. A close is seen as better proof that the market believes we should below a level and possibly lower. It turns out; October 15 was the low of the month, and the price is now pushing to the highest level seen since late August although resistance at 121.90 would be the next big test.
Understanding what the market apparently isn't willing to do is often helpful to place your next trade. Currently, USDJPY appears unwilling to stay offered as most spikes lower either subside into a consolidation or a breakout higher soon follows. If the breakout after consolidation pattern remains, the next levels of focus higher are 123.61 (100% extension off the 8/24 lows) followed by the year to date highs at 125.85. Because of the aggressive bounce higher from 118.60, support will remain at that level. Only a close below 118.60 would shift the focus bearish, but now we’ll look for higher prices in the days ahead. T.Y.
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