USD/JPY

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USDJPY

In November 2012, Japanese yen started weakening against the U.S. dollar. Cross rate started rising from 77 levels and reached 104 levels in almost six months. This was a sharp rally and was followed by a lengthy consolidation. Price action is cyclical. It will have high volatility, trend periods that are followed by low volatility, trading ranges. USD/JPY is going through a quiet period (trading range) which is likely to be interrupted by another strong trend period. Over the past few months the cross rate has been consolidating in a tight range and now it is ready for a strong directional move. Breakout above 99 levels will send the USD/JPY towards 104 levels once again. Breakdown below 96 will challenge the 200 day moving average at 94.5 and possibly target lower levels. USD/JPY is on our watchlist for a possible breakout.