USDJPY continues key support bounce

In the last few trading days, we have witnessed significant weakening of the Japanese Yen. It definitely accelerated today, at least during the European session. Let us take a closer look at USDJPY who has recently been trading really technically, respecting major supports and resistances.

USDJPY has been in downtrend since the middle of October. This downtrend is highlighted by the black down trendline that is currently the closest resistance. On December 20, the pair reached key horizontal support of 131.5 (orange), which was a key level from April to August. Buyers used this opportunity to stop the fall and initiated a bullish correction.

As for now, it is hard to imagine that the current rise is more than a correction. We do not have any decisive bullish reversal pattern. It can be assumed that in time, traders will resume selling. Most probably, it will happen when the price tests the mentioned down trendline. In my opinion, the sentiment remains negative and, sooner or later, the price will test the 131.5 support again.