USDJPY trades the highest level in five years. What next?

The price of the  USDJPY 
USD/JPY

The USD/JPY is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Japanese yen of Japan (symbol ¥, code JPY). The pair’s rate indicates how many Japanese yen are needed in order to purchase one US dollar. For example, when the USD/JPY is trading at 100.00, it means 1 US dollar is equivalent to 100 Japanese yen.  The US dollar (USD) is the world’s most traded currency, whilst the Japanese yen is the world’s third most traded currency, resulting in an extremely liquid pair, and very tight spreads, often staying within the 0 pip to 2 pip spread range on most forex brokers. Although the range of the USD/JPY isn’t traditionally particularly high, the lack of large price action often associated with other JPY pairs does make it easier to trade.This is especially true for short-term traders, although without offering a great pip potential. Even though the USD/JPY is the world’s second most traded pair, it’s not as popular as one might think with regards to retail traders.The pair carries a reputation as “boring”, although this isn’t an entirely accurate reflection. Trading the USD/JPYThe JPY is highly regarded as a safe haven currency, with investors often increasing their exposure following periods of uncertainty or market-induced fallouts.As both the US and Japan are highly developed economies, there are several key factors affecting the value of either currencies. This includes a range of economic indicators such as gross domestic product (GDP) growth, inflation, interest rates and unemployment data. Monetary policy by the US Federal Reserve and Bank of Japan are also large determinants in the value of each currency.

The USD/JPY is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Japanese yen of Japan (symbol ¥, code JPY). The pair’s rate indicates how many Japanese yen are needed in order to purchase one US dollar. For example, when the USD/JPY is trading at 100.00, it means 1 US dollar is equivalent to 100 Japanese yen.  The US dollar (USD) is the world’s most traded currency, whilst the Japanese yen is the world’s third most traded currency, resulting in an extremely liquid pair, and very tight spreads, often staying within the 0 pip to 2 pip spread range on most forex brokers. Although the range of the USD/JPY isn’t traditionally particularly high, the lack of large price action often associated with other JPY pairs does make it easier to trade.This is especially true for short-term traders, although without offering a great pip potential. Even though the USD/JPY is the world’s second most traded pair, it’s not as popular as one might think with regards to retail traders.The pair carries a reputation as “boring”, although this isn’t an entirely accurate reflection. Trading the USD/JPYThe JPY is highly regarded as a safe haven currency, with investors often increasing their exposure following periods of uncertainty or market-induced fallouts.As both the US and Japan are highly developed economies, there are several key factors affecting the value of either currencies. This includes a range of economic indicators such as gross domestic product (GDP) growth, inflation, interest rates and unemployment data. Monetary policy by the US Federal Reserve and Bank of Japan are also large determinants in the value of each currency.
Read this Term as traded to the highest level in five years on a surge higher today (highest level since the week of January 8, 2017).

Looking at the weekly chart, the move higher today surpassed the February 6, 2022 high at 116.33.

Looking at the weekly chart, the fall off the February 6 high came down to test the lower trendline connecting recent lows going back to September 2021. Holding that level over the last three weeks Gay buyers something to lean against. Staying on that chart, the topside trendline connecting highs from April 2021, November 2021, and more recently January 2021, cuts across at 117.55 (and moving higher.

Drilling to the hourly chart below, yesterday the price highs stalled near the same level at 116.18. In the early Asian session, the price started to move above that double top level, and then after a brief failure above the swing high from February at 116.33, the pair regrouped, pushed above the 116.33 level with more momentum, and the race to the high was on.

The high price for the day has reached 117.055. The price has been consolidating between 116.78 and 117.05 over the last seven or so trading hours (bull pennant?).

Drilling even further to the five minute chart below, the consolidation near the high has now seen the 100 bar moving average (blue line) catch up to the price. That moving average can be a bias/risk defining level in the short term.

The intraday buyers are so far leaning against that level.

However, if sellers can push below, the next short-term target would be at 116.788 (swing highs and lows today) below that the 38.2% retracement of the last trend leg to the upside at 116.735 followed by the rising 200 hour moving average and 50% midpoint at 116.637 would be targets. Move below the 200 bar moving average of 50% would spoil the mood for the buyers today.