The USDJPY gapped higher last night and traded at its highest level since April 2011. As focused on in FX Technical Weekly, price has completed an impressive inverse head and shoulders pattern. A test of the broken neckline (as support) would present an opportunity to play the longer term break against 8172 (December low). That line crosses above 8310 this week. Former resistance at 8283 is potential support. Keep an eye on the 20 day average for support as well (currently at 8252).
Bottom line; expect the pullbacks currently underway in the Yen crosses to continue for several days and probably the week. Nimble short term traders may wish to trade from the short side towards 8283 USDJPY (resistance is now 8391). I’ll be looking for USDJPY longs below 8283.
--- Written by Jamie Saettele, CMT, Senior Technical Strategist for DailyFX.com To contact Jamie e-mail email@example.com.
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Jamie is the author of Sentiment in the Forex Market.