111.70 new trigger level: USD/JPY technical analysis
USD/JPY technical analysis highlights the 111.70 as extremely important this week. Any downside technical corrections could reach the 111.00 and possibly the 110.60 levels.
The US dollar performed a major technical breakout against the Japanese yen last week, following the breach of the 110.30 level.
USD/JPY analysis shows that the 111.70 level is likely to act as a major pivot point this week, and offer directional guidance to bulls and bears
USD/JPY medium-term price trend
The US dollar rallied to its highest level since April 2019 against the Japanese yen week, as bulls finally broke the important 110.30 level.
I had previously warned that an aggressive up move could commence once the 110.30 was broken with conviction.
USD/JPY technical analysis over the medium-term shows that the pair has the potential to rally towards the 113.00 and possibly the 114.10 level while price trades above the 111.70 level.
The daily time frame shows that the USD/JPY pair has broken above a rising price channel, and the breakout remains valid while price trades above the 111.70 level.
Should we see repeated technical failure back outside of the structure of the wedge pattern, the USD/JPY pair could correct back towards the 111.10 and possibly the 110.60 level.
USD/JPY short-term price trend
Short-term USD/JPY technical analysis highlights that the 112.40 level offers strong upcoming resistance for the pair.
A large inverted head and shoulders pattern will form on the four-hour time frame if price reaches the 112.40 level.
The size of the potential inverted head and shoulders pattern suggests that the USD/JPY pair could rally towards the 118.00 and 121.00 levels.
Looking at the downside potential for the USD/JPY pair, repeated weakness below the 111.50 level could provoke a decline towards the 111.00 level and possibly lower.
Bearish MACD price divergence is also present on the lower time frames and extends down towards the 110.40 level.
USD/JPY technical summary
USD/JPY analysis indicates that the 111.70 level is likely to act a key pivot point. The 112.40 level is also another important resistance area to watch this week.