FX.co ★ Short-term technical analysis on USDJPY.

In ourlast analysis of USDJPY we warned bears of the fake bearish signal and the upside potential as price was trading at key support levels. Price made a false break down to 107.60 and quickly reversed back above the key trend line. This price behavior made us support the bounce scenario to 109 even more.

Yellow rectangle - bounce target area

Green lines -Fibonacci retracement levels

USDJPY is bouncing higher as expected. The 38% Fibonacci retracement and the red trend line support have provided the defense against a deeper pull back. USDJPY is trading around 108.60 there is potential of a move higher still. Key support remains at 108-107.70 and if broken then we should expect price to move lower towards the 61.8% Fibonacci retracement at 106.25.