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Technical Analysis: USDJPY retraces the heaviest drop in two months

USDJPY prints mild gains while bouncing off a four-week low. However, the bulls have miles to go as not only the 50-day SMA level of 105.65 but a falling trend line from July, near 105.90, as well as a seven-month-long resistance line, currently around 106.40, probes the further upside. It should additionally be noted that 105.00 offers an immediate upside barrier to the pair's recovery moves. Should the USDJPY buyers dominate past-106.40, August month's high near 107.00 could return to the charts.

Meanwhile, a falling trend line connecting lows marked from July 31, at 103.85, will continue acting as strong support during the pair's fresh downside. Though, 104.30 and the 104.00 threshold are minor halts that can please intraday sellers. In a case where the bears conquer 103.85, the yearly bottom surrounding 101.75 will become their favorite ahead of the 100.00 psychological magnet.

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