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USD/JPY Might Fail in Finding Support at 107.00

June 19, 2020 at 5:24 by Dorin Rosu

The US dollar versus the Japanese yen currency pair slipped under the 107.00 psychological level and had a hard time recovering since. Will the bulls be able to pull it off this time as well?

Long-term perspective

The appreciation that started from the 105.98 low turned the situation in favor of the bears, as it brought the price back above the 107.00 key support level.

The bulls benefited from this, printing a rally that noted the 109.85 high. However, from there, the price began a sudden drop, passing the ascending trendline and defining a new low under the 107.00 level, at 106.57.

On June 12, the bulls launched their counteroffensive, succeeding in sending the price beyond 107.00 yet again. But this week seems not to have served them, as the price barely departed from 107.00 before oscillating under it on Thursday.

Yesterday’s candle took the shape of a pin-bar, but because it rests under the level, it might lack an important part of the energy that it usually carries. However, as long as it not invalidated, the bulls still have a chance. The invalidation consists of one of the next candles ticking under the low of the pin-bar. If the pin bar’s scope gets canceled, then the bears could drive the price until the next intermediary support level, 106.12. Beyond this level, they could extend to the 105.09 major support level.

On the other hand, if the pin-bar remains valid, then the bulls have another go to confirm 107.00 as support and head for the intermediary resistance of 108.05. If they conquer that, then they have the green light for 109.08, their main target.

Short-term perspective

The depreciation that started from the 109.85 high was limited by the 106.77 intermediary level. As a result, the price printed the 106.57 low and then rallied towards 107.34, consolidating around this area.

However, the bulls were not able to conquer 107.34, which lead to the retracement to 106.77.

If the bulls do manage to confirm 106.77 as support, then they could hope for a rally that extends the price until 108.02. But if 106.77 gives way, then the bears can further push the price until the 106.02 key support level.

Levels to keep an eye on:

D1: 106.12 105.09 107.00 108.05 109.08
H4: 106.77 108.02 106.02

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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