USDJPY Overview

The USD/JPY is a volatile but predictable market due to its historical data and the emergence of repeating patterns. The USD/JPY has been stuck in a range of sideways consolidation since 2017 with only slight retests of previously established resistance levels. With the USD/JPY in a range of historical resistance levels the market will have a more well defined value to reach depending on volatility.

USD/JPY Analysis 

Starting in November of 2017 there is a two month long bullish run to find the range high at established resistance level 114.906. With high volatility in the USD/JPY it was able to maintain above the range high from December 8, 2017 to January 12, 2018. The USD/JPY stuck in disarray with high volatility and no clear direction, the USD/JPY stayed in a hallway of sideways consolidation testing and retesting range high resistance level 114.906 and lower range median resistance level 108.908 for all of 2017. With the beginning of 2018 and the USD/JPY in a pullback the USD/JPY came to retest the range low resistance level 106.642 before sustaining sideways consolidation from February 18, 2018 to April 3, 2018 allowing for one test of historical resistance level 104.652. With the inability of the USD/JPY to maintain below the now established range low resistance level 106.642 it moves to retest above resistance levels. The USD/JPY followed an upward trend for all of 2018 stuck in sideways consolidation between lower range median resistance level 108.908 and the range high resistance level 114.906. With the previous years trend following suit the USD/JPY is poised to follow a massive bearish run at the end of 2018. This lead the USD/JPY to spend December of 2018 in a death spiral to retest the historically established resistance level 104.651 on January 2, 2019. With an immediate pullback the USD/JPY finds itself in a hallway of sideways consolidation once again between lower range median resistance level 108.908 and upper range median resistance level 112.253. This leads into the current range the USD/JPY is stuck below. Since May 3, 2019 the USD/JPY has stayed between range low resistance level 106.642 and lower median resistance level 108.908 with only one main push and sustainment below the range low from June 30, 2019 to Sep 5, 2019 to retest the historically established resistance level 104.651. Shown in diagram A

If history should teach us anything it would be that with the current state of the USD/JPY and clear sideways consolidation prior to the new year is an established pattern for a pullback and retest of historically established resistance level 104.651 leading into 2020 with high volatility.

*Charts are created with TradingView, our partner in charting.
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Written by Nenad Jordanoski, Futures Trader and Technical Analyst.
Email: nj@thetrade.academy
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