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USDJPY opens year at low and looks to end near high

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USDJPY opens year at low and looks to end near high

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USDJPY trended higher in 2021

The year 2021 for the USDJPY can be characterized as an uptrend.

USDJPY had its low for the year on January 6 (the first week of the trading year) at 102.586. The year’s high (days to go) peaked at 115.513 on November 24. The current price is trading higher today at 114.86 – just 65 pips from the 2021 high.

The low to high trading range stood at 1292 pips. which compares favorably to the last 5 years

  • The 2020 range was 1106 pips
  • The 2019 range was 795 pips
  • 2018 was 996 pips
  • 2017 was 1124 pips
  • 2016 had the largest range around 2275 pips

Regarding the price action, the pair trended higher until the March 31 high of 110.96 (836 pips), corrected around 349 pips to 107.47 on April 23, before to spend the rest of the year consolidating laterally until it increases in the second half of the year. from September until reaching 115.513 by the end of November.

Technically, the run to March saw the pair move above the 100 and 200 week MAs (blue and green lines). April’s correction saw the price move back below the upper 200 week MA (green line), but stay above the 100 week MA (blue line). Bullish.

The 38.2% rise from the January low was briefly broken at the April 23 low, but returned above that line the following week. The pair hovered above and below the 200 week moving average before breaking higher towards the end of May.

The key for technical traders was the support buyers against the 200 week MA line in early August. Finding buyers against this MA line (even though the price had not initially risen until the week of September 19) gave buyers more control.

The higher race found willing sellers against a swing zone between 114.20 to 114.728 initially (highest dates back to April 2017 – see red numbered circles), before breaking higher towards the end of November. the November high stalled right next to swing high dating back to March 2017 (closest swing high going back in time). This level was the next target on the rise, and sellers leaned in. The price moved back below the profit-taking swing zone.

The subsequent and final correction of the upward movement from the April 23 low stalled just ahead of 38.2% at 112.441. This kept buyers in check. Bullish.

The price in the last 4 weeks or so has resumed its bullish movement.

And then ?

The price today is to try life again above the high of that swing zone at 114.728. Staying above could lead to another uptrend before the end of the year. It’s only about 65 pips.

Pass 115.51 and the gate will open for a run to the 118.655 area in early 2022, where the next major highs for the weeks of December 11, 2016 and January 8, 2017 peaked.

What could be detrimental to the bullish bias?

Descending below 114.202 would disappoint buyers looking for a continuation of the uptrend. Going below would not necessarily ruin buyer’s control, but it would weaken their technical hand and could lead to a drop to the 38.2% level at 112.441. Drop below this level and sellers will start to have more control from buyers.

Overall for 2021 it was to buy the year USDJPY. Longer term technical levels like the 100/200 week MAs came into play. There was a period where the pair consolidated in a price range, but maintaining the 200 week MA kept buyers under control and ultimately helped pave the way for a higher year-end and bullish bias through 2022.

USDJPY opens year at low and looks to end near high

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