USD/JPY Breaks Consolidation and Opens up 122

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USD/JPY Breaks Consolidation and Opens up 122

USD has been strong in the past week and the USD/JPY is breaking above a consolidation range. Let’s follow up on the charts.

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The 4H chart shows that since the end of March, USD/JPY has been consolidating roughly between 118.33 and 120.85. Today, this range is broken to the upside. This breakout effectively opens up the 122 high on the year with risk of continuing higher. If there is a pullback, a bullish market should find support around 120. If price instead falls below 119.75, the current breakout might be false, and pressure would be back towards the 118.33 low.

Now, sticking with the bullish scenario, since the prevailing long-term trend has been bullish since 2012, 122 is vulnerable. The daily chart shows that USD/JPY has been consolidating roughly between 115.56-122 (approximately 640 pips). Using this width as a projection, a break above 122 targets 128.40. But first, let’s limit the bullish outlook to 124-124.16 highs of 2007.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.
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