USD/JPY flies through 115 and comes back down. For now.

There’s no mercy for the Japanese yen. USD/JPY at 115 seemed imaginary just less than one week ago when the pair traded well under 110. In the latest Asian session,  dollar/yen broke above 115 and hit a new high at 115.50 but at the time of writing, the pair stands at 114.54, around 100 pips lower.

Here are the levels to watch:

We’ll begin by looking down, using the hourly chart:

On the downside, 114.80 provides support after  capping the pair on the way up earlier in the week. Further down, we have 113.15, a level that provided support before the recent rally.

The next level is support at the gap line, at 11.250. USD/JPY had a Sunday gap and wasn’t able to fill it. There’s not much below until 110.

And now, to the upside, using the monthly chart:

Looking to the upside,  the round number of 115 is still psychologically  important, but it’s also important to note the new high of 115.50.

Moving higher, we are back to more levels last seen in 2007,  seven years ago. 118 was the peak in October 2007, before a very big fall. It is then followed by 120, which is a very round number and also a peak seen earlier in that year.

Above, 122.20 was stubborn resistance  at the time, and the last big level is 124. Beyond this number, we have levels last seen in 2012, and that’s really out in the horizon.

For more, see the USD/JPY forecast.