USD/JPY has been drifting, with downward pressure towards the low on the year around 100.75. The 100.75-101 area is a key support area and traders seem to have defended it well last week, as we can see in the 4H chart.
You can argue that an inverted head and shoulders pattern emerged as the market put on a higher low around 101.50 after defending the 101 area.
102 was a key level last week, and the market wavered around it last week. To start this week, we are seeing another attempt to clear it. A break above 102.15 should put 102.35 and 102.70 in the near-term scope. However 103 is the level to break for a directional signal outside of the intra-session time-frame.
Roughly, the 101-103 level represents USD/JPY’s consolidation range for the past 2 months, as well as the one in February. A break above 103 will shift the focus from the 101 support area to the 104.13 pivot and the 105.44 high on the year.
While 103 is key resistance, 100.75 is an ever more significant support. A break below this clears the moving averages (200,100,50), and opens up the 100, then 99.00 handles in the short-term, and maybe even the lows around 97.00, which was the origin of the upswing that went to this year’s high.
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