- Risk-off flows not supporting yen, bulls in control seeking out the 114 handle.
- Symmetrical Triangle breaking down to the upside, eyes on 112.50s.
- Resistance levels to hold in near-term, ahead of low volume nodes.
The 2015-2020 downtrend has been taken put and bulls are controlling with a weekly close above 110.31. Bulls can target a run beyond 112.50s for a move towards 114.55, 2018 high.
USD/JPY monthly chart: Symmetrical Triangle
Characterized by two converging trend lines connecting a series of sequential peaks and troughs, the symmetrical triangle (ST) could lead to an extensive breakout, one way or the other, although a critical level of resistance at this juncture will need to give in. We have been here before and 112.50/113.00 has been a high area of acceptance by the bulls and bears, so we could see a period of consolidation prior to extensive gains towards the 114 handle.
Break-out may struggle through two key resistance areas
The 61.8% Fibonacci has been priced and the price is now testing the ST's resistance. Resistance 1 on the chart may lead to a head fake on initial attempts beyond the resistance and then the 112 handle. Resistance 2 will likely hold numerous attempts through the 114.55, 2018 high.
Bulls to target low volume nodes
As far fetched as it may seem, the reality is that the yen correlation to risk-off has been dismantled in recent sessions. Gold has rallied some 6.5% vs the US dollar yet the yen has dropped 3.6% in the same time frame. The coronavirus and economic impact it is seen to have in Asia is the likely reason for an exodus from the yen. On such a foundation, it is more feasible to see USD/JPY rally and should it breach the Resistance 2 on the chart above, according to historic price action, there would appear to be little resistance towards a 138.2% and 116.8% levels, the 'Key Objective' area marked out on the chart above.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD trades sideways below 1.0450 amid quiet markets
EUR/USD defends gains below 1.0450 in European trading on Monday. Thin trading heading into the Xmas holiday and a modest US Dollar rebound leaves the pair in a familiar range. Meanwhile, ECB President Lagarde's comments fail to impress the Euro.
GBP/USD stays defensive below 1.2600 after UK Q3 GDP revision
GBP/USD trades on the defensive below 1.2600 in the European session on Monday. The pair holds lower ground following the downward revision to the third-quarter UK GDP data, which weighs negatively on the Pound Sterling amid a broad US Dollar uptick.
Gold price sticks to modest gains; upside seems limited amid USD dip-buying
Gold price attracts some follow-through buying at the start of a new week and looks to build on its recovery from a one-month low touched last Thursday. Geopolitical risks stemming from the protracted Russia-Ukraine war and tensions in the Middle East, along with trade war fears, turn out to be key factors benefiting the safe-haven precious metal.
Bitcoin fails to recover as Metaplanet buys the dip
Bitcoin hovers around $95,000 on Monday after losing the progress made during Friday’s relief rally. The largest cryptocurrency hit a new all-time high at $108,353 on Tuesday but this was followed by a steep correction after the US Fed signaled fewer interest-rate cuts than previously anticipated for 2025.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.