USD/JPY: Has It Topped?

Last time we posted an analysis on USD/JPY we noted how much higher it can travel and that the area of 100 was too dificult to be broken on the first try. Bulls were warned to be cautious as a pull back was to be expected. Our upward-sloping channel gave us a target between 99.50 and 100 for a top. And that is what happened. Prices got rejected once they touched the upper boundaries of the channel.
USD/JPY H4" title="USD/JPY H4" width="652" height="519">
Our first condition for a top has been met. However we should now expect a pull back down towards the lower boundaries of the upward sloping channel at 95-96 level. As long as it stays within this channel, the longer-term trend will remain upward. If broken, bears will take control. As always our favorite strategy is to bet in favor of the support and resistance levels. That is why we believe it is more prudent to close long positions at least since prices reached the resistance level our technical analysis showed us.
USD/JPY 1 Hour" title="USD/JPY 1 Hour" width="652" height="519">
Taking a closer look at the one-hour chart, we point several support and resistance levels that, if broken, could provide good fast profits for short-term trades. Increase weakness and continuation of the short-term downtrend will be confirmed if 97.50 is broken. Above 98.70 short term trend could again change to up, giving bulls another chance to retest the highs. Above 100, prices will be making new highs and we expect to see 102-103 levels as they are the next targets.

For more help trading this pair, don’t hesitate to contact us. As always, thank you for taking the time to catch up on our thinking.

Disclosure: None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions.