In our previous post we predicted an imminent break out price action for the USDJPY pair(https://fxsits.com/falling-wedge-formation-price-action-on-usdjpy/). In that post we noted that the Fibonacci level 38.2 acted as a support level. Price had to break past this level ,before we saw any strong bullish movement. In the chart we clearly see that price consolidated within that fibonacci level and level 107.029.
On the H4 time frame, you may notice how price has respected the Fibonacci level for some time before breaking. You may also notice it breaking the long term bearish trend-line. Price does this before bullishly engulfing the previous candles.This signals a strong bullish break from the falling wedge, that price has formed these past months.
In the daily time frame , we see that price is forming a very huge bullish engulfing candle. This signifies a continuous bullish movement. For now level 108.577 is predicted to be our new resistance zone. If price breaks this level, we may see price reach the Fibonacci level 23.6 .
However if price retraces we may see level 108.080, acting as our new support for the pair in the up coming days. Bear in mind that the USDJPY break out price action could keep a strong bullish momentum if we see price break today.
NB: Warning Before deciding to participate in the Forex market. You should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, do not invest money you cannot afford to lose. Consider position sizing before you enter a trade and manage your risk accordingly. Please read risk warning before deciding to trade the markets