USDJPY Chart Update: Another Reason for 85
Last week, I was all over the weekly cloud cover break in USD/JPY (see chart one), talking about how important it is and why further gains are likely. It is a new month now and we have another important technical break on the monthly chart (see chart 2). USD/JPY closed above its 20-month SMA. This confirms the degree of bullish sentiment in the market right now and reinforces my view that USD/JPY is headed higher for 85.
Over the past 18 years, USD/JPY has CLOSED above its weekly cloud only 4 times (not counting this one) and in 3 out of those 4 instances, a very sharp rally in USD/JPY followed.
1995 break -- USD/JPY rose from 97 to a record high above 146
2000 break -- USD/JPY rose from 108.50 to a high above 134
2005 break -- USD/JPY rose from 108.50 to a high of 124
2009 break -- FALSE BREAK
2012 break -- ????