The #USDJPY price is currently breaking through the weekly lows. Is this showing us that the #JPY is gaining strength?
Today, we’re going to look at USD/JPY as the price broke through last week’s low.
Now that the market is breaking below last week’s low, it is being used as resistance. If we get a rejection of last week’s low, we may be able to look for short-term trading opportunities.
We have a nice channel forming in the daily timeframe. Last week’s price failed to break out of previous structural highs. The false breakout actually created a very clear reversal pattern.
The USD/JPY price action is showing the price break through last week’s low. This means that the JPY is stronger than the USD at the moment. In the strength and weakness table, the JPY was at the lows but it was gaining strength. If the price breaks out of the channel, USD/JPY could offer short-term trading opportunities.
We’re going to look at the low because if we get two daily closes below, then the daily trend will change. That could be a sign that the weekly is entering an impulse phase and that we could see the price go back down to previous structure lows. The weekly low is at 109.324.
In the four-hour timeframe, the price is just breaking below that area. I want to see a couple of closes below the low so we could potentially trade off of it for a continuation to the downside.
Now that the price is breaking to the downside, we can look at resistance levels. We can look at last week’s close. We have an open high, low close at the candlestick at the bottom. We need to close at 109.534. That area could also act as resistance.
If the price ignores the weekly low, we can look for it to pull back, look for reversal patterns at 109.534, then look for short opportunities.
If the price closes below last week’s low we could look for further short opportunities. The resistance levels to watch our last weeks close at 109.534 and last week’s low of 109.324. If the price rejects either of these levels we could look for a short opportunity on the pair.
So keep those in mind for USD/JPY. We could start to see the JPY gain strength by the looks of things.
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