A couple weeks ago we talked about the inverted head and shoulders pattern that was formed in USDJPY. Currently USDJPY is trying to break out and above the neckline resistance to produce the much anticipated bullish signal and activation of the pattern.
Blue line - neckline resistance
USDJPY has made an explosive upward move over the last few weeks and has risen in a straight line from 117 to 125. Last time we saw similar price action was in 2014. The formation of a higher low in 2016 and in 2020, combined with a break above the highs of 2015, provides an explosive mix for bulls. The weekly RSI is at overbought levels but is also making new higher highs. We might see a pull back over the next couple of weeks but overall we expect trend to continue higher.
