FX.co ★ USD/JPY downside movement activated

USD/JPY extends its drop

The USD/JPY pair was dropping at the time of writing after failing to stay above 113.44 former low which represented a downside obstacle. After falling below the uptrend line, the pair was expected to decline further. Still, in the short term, it has tried to increase a little to retest the broken uptrend line.

Personally, I've drawn a downtrend line after the price has failed to reach 114.28 high. As you already know from my previous analysis, USD/JPY could develop a larger downside movement if it drops and stabilizes below 113.44.

USD/JPY trading conclusion

The current drop below 113.44 opened the door for a deeper decline. As long as it stays below 113.44, USD/JPY could approach and reach new lows. 113.00 psychological level is seen as the first downside target and obstacle.

Besides, a drop below this level may activate a broader downside movement. 112.00 could be used as a potential downside target as well.