USD/JPY Attention At Support!

USD/JPY is trading in the red as expected and is pressuring a critical static support level. I've told you in my previous analysis that the pair should drop deeper after the most recent rebound.

USDX's drop has driven the pair lower at 104.19, but it remains to see if the price has enough bearish energy to tale out the immediate support levels. Surprisingly or not, the greenback has lost significant ground even if the US Durable Goods Orders and the Core Durable Goods Orders come in better than expected in yesterday's session.

Unfortunately, the CB Consumer Confidence has decreased unexpectedly, from 101.3 to 100.9, even if the specialists have expected to see an increase to 102.1.

USD/JPY flirts with 104.18 static support, a valid breakdown below it will signal a deeper drop. You can notice that the price is trapped in a range between 107.03 and 104.18 levels. Its failure to approach and reach 107.03 has signaled the current decline.

The currency pair was expected to drop after printing a Head & Shoulders pattern on the H4 chart. The price has rebounded only to retest the Pivot Point (104.97) level and now it goes for fresh new lows.

The 104.18 and the S1 (104.10) are seen as near-term support levels. A valid breakdown through these downside obstacles suggests selling with a next target at the S2 (103.51) and at the first warning line (wl1). You should be careful because the price has registered another false breakdown under 104.18 in the past.

A long opportunity could appear only if USD/JPY registers several false breakdowns below the immediate support levels. Also, a major reversal pattern printed in the support area could signal another leg higher.