USDJPY approaching key resistance
17 May 2023
Long time no see with one of the most important pairs on the market – the USDJPY. We have not analyzed this instrument for some time due to a simple reason – nothing was really happening and the price was moving sideways.
This sideways movement can be technically described as a symmetric triangle (black lines). At the end of March, the price was testing the lower line of this pattern, bounced and is currently approaching its upper line. The most recent upswing is supported by the mid-term up-trendline (red) which will be the closest mid-term support. When we will get a proper trading signal here?
From the price action point of view, the situation is pretty simple. The USDJPY breaking the upper line of the triangle and closing a day above the highs from March would give us a signal to buy. On the other hand, the price bouncing off the upper black line with some kind of a bearish candlestick pattern would give us a signal to go short. In my opinion, the chances of the first scenario are slightly higher.