USDJPY Bulls’ Breakout and Retest After Expansion

USDJPY Analysis: Expansion Leads to Bulls’ Break Out and Retest

USDJPY bulls’ breakout and retest after expansion led to a bullish run in September. The market was held in a consolidation that lasted for several months. The month of September ended with an impulsive move. There was a sudden expansion from the 109.019 demand zone. The expansion led to a breakout and retest from the long-term consolidation. The significant level at 109.010 was retested. The Moving Average created a steep slope which guided the market out of the range.

USDJPY significant levels:

Resistance Levels: 115.410, 110.810
Support Levels: 112.710, 109.010

USDJPY long term trend: Ranging

New resistance and support levels were formed with the new consolidation. A new demand zone was formed at 112.710. The demand zone has been tested twice. The resistance zone was created on the 25th of November last year. The price filled the area within the Bollinger bands till the upper bands were hit. This caused a massive sell-off in one day. A false breakout was seen to occur afterward. The whole market had formed an ascending triangle from the breakout in September last year. A breakout and retest have formed on the daily chart outside the ascending triangle. Three bearish daily candles formed after the retest.

USDJPY Short Term Trend: Bearish

The Stochastic revealed that the market was oversold in the four-hour timeframe. The breakout and retest was followed by a sharp rejection. This is obvious with wicks that slightly pierced into the upper band of the Bollinger. The Moving Average of the Bollinger Band has switched sides to hang above the candles. The bears are currently driving the market down.

The market is currently oversold on the four-hour Stochastic. This correlates with the Bollinger bands. The candles have rested on the lower bands, which is likely to act as a support. This is likely to cause a retracement towards 115.410. The bears are currently aiming for the 112.720 zone. Hence, the anticipated retracement is likely to be utilized to gather more momentum for a bearish move.

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