The greenback continued to be offered on Monday, and the USDJPY pair was down half a percent, trading at six-week lows at around 108.25.

The major support at around 108.30 was broken to the downside, and stop-losses were hit, sending the greenback further lower. If the pair closes below 108.30 on a daily basis, it could be a strong bearish signal, implying the medium-term uptrend has ended. 

In such case, bears will most likely target 106.90, 106.20, and the next strong support near 105.

However, markets are known for stop-loss hunting. Thus, the USDJPY pair could start rallying now cause most short-term traders should be stopped out. 

The first intraday resistance is now at 108.35, and if not held, further rally toward 108.60 could occur. Long positions should be attractive if the USDJPY pair closes above 108.35 on the daily chart. 

US yields moved sharply higher today, which could support the USDJPY pair for a daily reversal. 

Source: https://www.axiory.com/technical-analysis/usdjpy-drops-below-major-support

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About Author

Peter Bukov

Peter comes from a background in corporate finance which began in 2013 when he completed the Corporate Finance Program at the University of Economics in Bratislava. He’s been actively involved in the market sector since 2008 and got his hands-on experience in trading in 2011. His experience in finance and trading continues not only as a market analyst at Axiory Intelligence but also through his studies to obtain a degree in Capital Markets. The study is in line with MIFID II regulations and is under the supervision of the European Regulator ESMA, which strongly emphasizes ethics and morale in investing and working with a client.

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