As shown on the weekly chart below , the USDJPY has formed an inside bar pattern last week , It’s a bearish reversal pattern , but sometimes it turns to bullish If the market breaks at the opposite direction !!!
Resistance comes at the 118.97 levels while support comes at the 115.44 levels , stability below the 118.97 levels on a weekly closing basis could mean a return to the 115.44 levels , If 115.44 fails on a weekly closing basis , next support would be 112.00 levels , but in return , break of 118.97 on a weekly closing basis will target (118.98+353 = 121.50 ) levels , further upside will aim the (121.50 + 353 = 124.03 ) levels.
353 pips is the length of the outside bar !!!
Minor support comes at the 117.22 levels below this level will open 115.44 levels .
Any way , Today I’ve noticed something strange , If you read my previous – weekly forecasts – for the USDJPY the past few weeks , I guess you have noticed my resistance levels at the 121.50 levels and 124.12 levels , those levels are confirmed by weekly %R(Williams) But I’ve noticed something strange today , If USDJPY breaks above 118.97 , weekly targets of the Inside Bar Pattern are the same as weekly targets of R%(Williams) indicator at 121.50 and 124.00 levels.
Note that according to weekly %R , stability above the 118.00 levels on a weekly closing basis will open 121.50 next , further upside will aim the 124.13 levels , last week the pair closed above 118.00 levels , but we need another close above 118.00 levels to avoid false break out !!!
Finally , If you take a look at the daily chart below , the weekly resistance 118.97 has been rejected with bearish divergence , neckline comes at the 117.22 levels , below this level will build strong pressure on the 115.44 even may break lower !!!
Conclusion : we have 3 options:
1- stability above the 117.22 will build pressure on the 118.97 levels , a clear break above this level will open 121.50 next.
2- A failure to hold gains above the 118.97 levels could mean a return to the 115.44 levels , as a result ; the USDJPY may consolidate within 115.44/118.97 levels for several weeks ..
3- Losing the 115.44 levels will turn outlook bearish and open 112.00 levels ahead of the 107.55 levels.
What’s next destination ?!!…..I think Nonfarm payroll – next Friday – will give the pair the needed fuel to go up or downs !!!