USDJPY – The US Dollar is gaining ground against the Japanese Yen. All looks happy and dandy for the USDJPY bulls at the moment. Every day is a Sunday and they can smell the flowers while trading on their desk.
But how long can this elevated move in the USDJPY sustain itself?
If you look at the daily chart above, it is quite clear that we are in a down trend. We can also see that this pair is quite good at making long swings to the upside before crashing down fast an furious to the downside.
I am a realist and I wouldn’t mind the USDJPY bulls having their fun but at the same time, I would want to know how far this move would go. Will it end soon?
Looking back at the chart, you can see two yellow slightly up sloping lines that I have drawn to show where the USDJPY price might go. At the moment it is very near the resistance line of that yellow line.
The question is would it reverse when it hits that point? Would the anxiety to sell hit epic proportions when price hits that level?
Would we be seeing double tops or triple tops forming at that level or would the price just blast through that level without batting an eyelid?
I am observing closely at the moment and I have even gone on to observe using the lower time frame charts like the 15 minute chart and the 1 hour chart with the hope of spotting some reversal signals on those charts.
Before the signals form, I am still an observer of the USDJPY.
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