USDJPY has been moving in a horizontal trend (consolidation) for a long time. It is worth noting that the upper and lower limits of this box, which were set successively at the levels of 115.20 and 108.40, have not been tested for a long time. In return, strong supply reactions have already appeared in the area of 114.35 and demand at 109.00. As a result, we are able to designate two zones around which we expect to see stronger responses that could change direction of the market.
Considering that last Friday market rejected the green support zone, we would expect we could continue the upswing that has been taking place since then. From a technical point of view growth could even reach the (pink) resistance zone.
Looking at H1 interval, we note, however, that price was now in the vicinity of significant resistance, where first supply reaction was already present. As long as this level is not permanently defeated, I would be cautious with opening long positions. If, however, supply response is sufficient to discard this zone, potential drops could reach even around 110.10 and 38.2% of the Fibonacci correction from the last upward movement giving the potential for more than 70 pips of growth.
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