This week we decided to show the monthly USDJPY chart as it appears something of great importance is happening there. Namely, the pair has reached a significant monthly resistance zone at the 110.00 area, which may stretch as high as 112.00 before being considered fully broken.

Essentially, this chart shows the protracted USDJPY consolidation with a downward tendency since December 2016. It appears clearer now that the consolidation has shaped up into a channel formation, which presently puts its resistance trendline around 110.00. Notably, March 2020 saw both the resistance and support lines of this channel tested.

What happens here now is hard to tell. Although lower timeframes show momentum is strong and USDJPY can go to 110.00 and above, the monthly resistance here is significant. Remember, only with a strong momentum close above 112.00 will this consolidative channel formation be deemed broken. Subsequently, such a scenario – if it transpires – would have massive bullish implications for the USDJPY pair.