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USDJPY has just recently broken out of a ranging/consolidation period that the market was stuck in for the majority of February. A clear breakout occurred to the highside when the range top was breached in the heat of last week’s high impact news release frenzy. We are now seeing some of those gains being taken back as a bearish retracement took place earlier this week.

The bears have weakened price back into a key level, which was the old range top. This type of ‘range breakout & retest’ pattern can create good trading opportunities. We’re now watching for bullish price action to kick in here and confirm this price level is going to hold as support and create a new swing level. A nice strong candlestick reversal signal would be nice confirmation to consider long positions. Waiting to see how the candle closes at the end of the New York session.

If the bears push price lower, and the candle closes back into the range boundaries, then it’s likely we will see another test of the range support.

usdjpy testing old resistance