USD/JPY Technical Analysis: Retest of Highs, Long-term Levels Near
USD/JPY Technical Highlights:
- EUR/USD burst higher quickly reversed
- Near-term swing level stands in way of March lows
The USD/JPY move during March was something to behold as the market was clearly caught on the wrong side of it. The move ended with a bang and right near multi-year highs over the 12500 mark. The pullback that came was to be expected given the 10 figure run proceeding it.
Now that it is on the offensive again it will be interesting to see how another run in with 12500+ will be treated. The thinking is that it could result in a swat lower as the market needs more time to digest last month’s activity.
The high from 2015 at 12585 is the high of highs to watch, just above the March high at 12510. A small breakout of the March high may draw in new buyers, but will need to be careful with the more important level just beyond there.
A knife through would pave the wave for an even more extended move, a scenario that certainly can’t be dismissed after volatility in USD/JPY was suppressed for several years. Even the pandemic only awakened it temporarily.
A reversal around resistance may keep USD/JPY sidelined for a few weeks. This would do it some good to rebuild up power to continue pressing on to even higher levels. For now, a short trade may develop on a failure to break above resistance. Will update as things progress.
USD/JPY Daily Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.