FX.co ★ USDJPY challenges support

USDJPY is now trading at an important short-term support area. In this area we find both horizontal support and a trend line support coming from 103. USDJPY bulls need to hold price above 108.50. Failure to do so bears will take control of the short-term trend and will most probably push price towards 106.

Green rectangle - support

Red line- support

USDJPY has resistance at the recent double top at 109.70. Bulls need to defend 108.50 and provide fuel to push price above the 109.70 resistance in order to be in full control of the trend. Otherwise, USDJPY is vulnerable to breaking support and falling towards 106. At current levels risk reward favors bulls as price is very close to support. However the momentum is negative and this is not in their favor. It is preferred to stay neutral and if price starts to bounce from 108.50-108.70 then bulls can step in. If price breaks support then we should expect an accelleration to the downside.