Key Rejection at Neckline Leaves USD/JPY Buyers in Control

In today’s technical breakdown, we take a closer look at USD/JPY, which currently finds itself at a pivotal level.

The chart presents a large Head and Shoulders pattern, marked in green, with the blue neckline acting as critical support. Yesterday was a defining moment for this pair, as price action brought us into direct contact with this neckline. A decisive break below would have signaled a strong sell opportunity, but instead, buyers stepped in forcefully, pushing the price higher and invalidating the immediate bearish scenario.

This rebound provides a strong short-term buy signal, though the bullish case is not fully confirmed yet. There remains one final obstacle: the red resistance line, drawn from the top of the head through the top of the right shoulder. Only a breakout above this red resistance would completely nullify the bearish outlook and open the door for a full-fledged long signal.

For now, USD/JPY remains trapped between the neckline support and the resistance above, with both bulls and bears looking for a decisive breakout. Traders should stay patient and wait for confirmation—a close above the red resistance to go long, or a drop below the blue neckline to go short.

Source: https://www.axiory.com/analytics/technical-analysis/key-rejection-at-neckline-leaves-usd-jpy-buyers-in