USD/JPY - Weekly Forex Analysis

USD/JPY (a daily chart of which is shown) displayed some dramatic bearishness for the entire past week, falling almost 500 pips from the week’s open to the Friday close. By the close of the week, price had closely approached strong support in the key 94.50 region. This price level represents the peak in January between the 87.00 double bottoms. Currently, price has formed a rough head-and-shoulders reversal pattern. It is rough only because the neckline is unclear as to whether it should be placed around 96.00 or much lower. In any event, the bearishness in the pair has been well-established, and price is now at a critical juncture for the upcoming trading week of May 18-22.

A strong breakdown below key support in the 94.50 price area should target the next major support around 93.50. And further to the downside is the important 91.00 support/resistance level.

Upside resistance now resides in the 96.00 region after this important previous support level was broken to the downside in the past week.

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