Is USD/JPY poised to break higher?
After being stuck in a sequence of lower highs over the past four years, traders are watching to see if USD/JPY can break higher.
The US dollar was once worth ¥125.00. That was back in mid-2015, when the Fed was beginning its tightening cycle. It proved to be the peak for USD/JPY for the next few years. In the following 12 months, the currency pair fell to ¥100.00. While it has had periods of sustained recovery since then, the overall trend has been lower, with lower highs in December 2016, November 2017, October 2018, April 2019 and, potentially, January 2020.
Is change in the offing?
But perhaps things are about to change. Over the past few weeks the price has stabilised above ¥108.00, and seems poised to challenge trendline resistance once again. A rally above ¥110.00, the peak from January, would mark a long-term bullish development, and suggest that, in the near-term at least, a rally to ¥114.00 and the resistance zone from 2017-2018 was now in play.
If nothing else, the price has shown, since early 2018, a distinct unwillingness to move below ¥104.80. The price has held support three times at this level, and crucially the last bounce from here also coincided with a bounce from trendline support, as a rising trendline from the June 2016 low came into play. If ¥104.80 is broken, then a more bearish view develops, with the 2016 lows at ¥100.00 the next big levels to look out for.
This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. Any research provided should be considered as promotional and was prepared in accordance with CFTC 1.71 and designed to promote the independence of investment research. See our Summary Conflicts Policy, available on our website.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.8 pips on EUR/USD
- Analyze market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on the most popular forex markets
See more forex live prices
Prices above are subject to our website terms and agreements. Prices are indicative only
