Hello traders! USD/JPY trend remains bearish as the price continues to print lower lows and lower highs. Throughout this week, the price has been rejecting the 200 Simple Moving Average along with the 127.2% Fibonacci retracement level applied to the previous corrective wave up after breaking the 200 EMA.
Clearly, the resistance area has been formed between 105.65 – 105.80, which remains to be respected. This shows bearish dominance, but only as long as 4h closing prices remain below 105.80. Considering the most recent rejection of the simple downtrend trendline, USD/JPY could start to move down any time. The nearest resistance is located near 105.15, which is confirmed by two Fibonacci retracement levels. The first is the 227.2% retracement level and the second is 38.2% Fibs applied to the current pullback, which took place between 21-30 September.
All-in-all, this could be a fast downside move, because the support is only 50 pips away. However, daily break and close below 105.00 psychological support might result in a long term downtrend continuation.
Bias: Strongly bearish while below 105.80
Potential Resistance Zone: 105.65 – 105.80
Potential Targets: 105.15
Have a profitable trading!