The USD/JPY broke the 2014-high of 121.70, but only barely before stalling at 122. It is consolidating now, so let’s take a look at the charts and get ready for the breakout.
The USD/JPY is basically ranging between 120.60 and 122. There is a medium-term rising trendline and a short-term falling trendline, which are converging and price is approaching this crossroad.
The favored scenario is a break above 121.60, which would open up the 122 high with risk of breaking higher.
To the downside, because of the prevailing uptrend, it will take not only a break below the rising trendline, but also a break below 120.60 before introducing a price top in USD/JPY. In this scenario, the bearish outlook should first be limited to the 119.50-119.85 support/resistance area. Below 119.50, the next support will be the mid-February lows in the 118.30-118.60 area.
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