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Market Update: USDJPY Set to Retest Resistance?

jeffriess
February 22, 2021
by Joseph Jeffriess, Market Analyst

Hi traders, today we’re taking a look at the USDJPY D1 chart as buyers have started to push the continuation case.

The USDJPY has seen a solid start to the week adding 0.40% to this point after the 0.52% it gained last week. The USD has seen a mini-revival into today’s European session pulling back losses to risk currencies after fresh demand came flooding back in.

Looking at the USDJPY D1, we can see today’s strong rally that has been building throughout the session so far. Buying started at the open reconfirming 105.35 at short-term support. We’re looking for this level to hold and continue to support buyers in confirming a possible trend continuation move. Price remains in a new trend after breaking out above 103.80 back in January. Since that break, we have seen 3 higher lows and a series of higher highs supporting the new trend.

US Dollar vs Japanese Yen Daily chart, 22 Feb 2021

USDJPY D1 Chart

Looking forward, we want to see today’s rally hold. If sellers cut the rally this could be a sign of failed momentum. We would like to see buyers hold a close above Friday’s high to suggest they remain in control. If buyers can continue we will be looking at R1 and R2 as key levels of resistance. These two levels have already both stopped previous rally attempts. A break of these levels maintains the current trend with new higher highs set up.

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