Long-Term Key Resistance Exposed

USDJPY is trading above the 150.00 handle and the pair has arrived at a key long-term area of resistance. There are a number of important technical factors to note at current price levels:

• A multi-year bull channel, drawn from the September 2012 low, clearly illustrates the importance of current resistance at the 152.50 area.
  • The channel top was tested and pierced in October ‘22 and in October last year - see chart below.
  • Recent gains suggest that we are likely to see a third challenge on resistance at the channel top.
  • The number 3, is regarded as an important one in technical analysis. If USDJPY tests the channel top and fails on this third attempt to deliver a clear break, the risk of a deeper pullback or significant reversal would increase.
  • It is worth noting that the base of the channel - currently at 115.26 in March - could potentially represent a medium-term objective following a key reversal.
  
  
• Looking at a long-term chart, the Aug 1998 high was 147.66. This resistance was breached in 2022 and again last year, however, the USD has not yet confirmed a clear break of this important hurdle for bulls.
  • A bullish monthly close in March followed by a strong April would highlight a clear break of the 1998 high. Note that this would also highlight a break out of the multi-year channel. This would strengthen the medium-term uptrend.
  
  
• Key support levels to watch:
  • SUPP 1: 149.27 20-day EMA
  • SUPP 2: 148.61 50-day EMA
  • SUPP 3: 146.49 Low Mar 11. A break of this support would highlight a breach of the 20- and 50-day EMAs and signal an important reversal.