USD/JPY Rallied Without Recovering The Gap

USD/JPY picked the scenario where it continues moving north and today it reached the strong resistance level at 111.00. At this stage it could not break out above it, but I think that it is possible to continue rallying to the resistance trend line of the channel after a small correction.

Still, I don’t know of many cases where the currency pair reverses its trend so suddenly without making at least one attempt to test the support trend line and I admit that I find the current development surprising. I still think that at least one test of the trend line could still be possible. There is also the fact that the gap from 24th April has not been recovered yet.

For now, however, USD/JPY is moving within the channel and while it remains that way all surprises are possible.

I have drawn the most probable scenarios, in my opinion, on the screenshot. In all cases, I think that the interesting development will begin once there is a breakout of the channel. I expect it will be to the upside, and if that happens we could expect a considerable move north.