On Oct. 21, was our chart of the day, and overnight we managed to break lower from the triangle formation and get very close to the 104.00 level. By the end of the session, we closed back above the 104.50 level, which should have the bear’s attention. The risk of a reversal is high, especially by the end of the week if we close above the 104.50 level. A false breakdown could lead to a breakout (higher) in the weeks ahead. If you look longer term (not pictured), over the last three years USD/JPY dropped close to 104.50 and turned higher immediately except for March of this year due to COVID-19, which took a week or two to turn higher. Knowing that, it is hard to be short USD/JPY down here while above the 104.00 level.
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