- In early Monday trading, the USD/JPY demonstrated a rally against the Japanese yen, which has been losing value. However, there has been some resistance encountered around the ¥140 level, warranting close attention from traders.
- It is worth noting that this level has been breached before, and now it is a matter of time before a breakout above the recent high occurs.
- Such a breakout would likely propel the market higher, with a potential target of ¥148 based on a previously marked ascending triangle on the chart.
While an immediate move to ¥148 is unlikely, and it is not advisable to rush into the market, I maintain a bullish outlook and believe it is only a matter of time before the broader market follows suit. Nevertheless, it is essential to consider the inherent choppiness associated with this currency pair when entering a position. Proper position sizing is crucial, and clarity should eventually emerge. Once a breakout above the recent high occurs, the next target will likely be around ¥142.50.
The Market Encountered Resistance
If the market retraces, the top of the previous consolidation triangle lies around the ¥138 level, making it a potential area of value to monitor closely. While I do not anticipate a decline to that level, should it occur, I would be particularly interested in any supportive candlestick patterns or signs of a possible bounce. Moreover, the 50-Day Exponential Moving Average is approaching that area, further reinforcing its significance. The convergence of these factors suggests that the two could intersect in due course, but the question remains whether it will happen closer to the ¥138 level or further down the road. This would be a big pullback and one that I would be interested in.
Too Long Didn’t Read? The US dollar experienced a rally against the Japanese yen in early Monday trading. The market encountered resistance around the ¥140 level, necessitating careful observation. A breakout above the recent high is anticipated, potentially driving the market towards ¥148 based on a previously identified ascending triangle. While the immediate movement to ¥148 is unlikely, a bullish outlook prevails. Traders should remain cognizant of the pair's inherent choppiness and exercise proper position sizing. The ¥138 level represents a potential area of value, but the timing of the market's convergence with that level remains uncertain.
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