The US Dollar continued to move higher against the Japanese Yen, and traded above the 125.00 level. However, it looks like we are about to see a major top in USDJPY as there are many warning signs emerging. If we see the monthly chart, then we can notice that a similar rally happened in the late 1190’s when the pair fell sharply. Also, the pair is facing a major resistance around 126.00-127.00 where sellers might take a stand.
On the Weekly chart, there is a wave duplication pattern forming, which might stall the upside in the USDJPY pair. So, I think looking for a sell opportunity on the lower timeframe might be a good option.
Technical Analysis
Monthly – Critical resistance and similar wave formation on the monthly chart.
Weekly – Wave duplication is also around the highlighted resistance area.
Entry:
H4 – We can enter a sell trade for the USDJPY pair once the pair spikes higher to trade near the highlighted trend line and creates a bearish divergence.
Target 1: 124.00
Target 2: 122.00
Stop Loss: Above the high created before entering into the trade.
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