Tuesday, January 19

JPY 1Q Forecast: 2021 Could be the Year JPY Wakes Up

Looking ahead to next year, I am thinking about what could move – and yes this will sound a bit contradictory to me saying in my “Mistake of the Year” piece that I will focus more on what is moving and less on what isn’t. There is a difference between observation and trading.

At any rate, I think it is a good idea to at least keep an eye on what may come next so as to be prepared. With that in mind, the place to be next year could be JPY, as the charts become increasingly “dead” and coiled up. USD/JPY and EUR/JPY are a couple of charts that hint at possibly making big moves. Wedge formations can be tricky and do a little ‘shape-shifting’ before breaking out, but the sequence of narrowing price action at some point leads to some type of expansion in range that can benefit the directional trader.

USD/JPY Weekly Charts – Wedge Break May be Nearing

USD/JPY Weekly Chart

Chart prepared by Paul Robinson, created with TradingView

EUR/JPY Weekly Charts – Range Contraction Set to Up to Expand

EUR/JPY Weekly Chart - Range Technicals

Chart prepared by Paul Robinson, created with TradingView

Credit: DailyFX


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