Hello traders! What is interesting about USD/JPY is an extended sideways move. Price continues to trade within a very narrow range, specifically between 108.00 resistance and 107.30 support areas. The consolidation has been on for the past week, where the price failed to produce any strong moves.
But USD/JPY also failed to break above the key resistance level at 108.00. Not only it is a strong psychological level, but also a key Fibonacci resistance, confirmed by two retracement levels. First is the 23.6% Fibs applied to the 24 March – 24 April downtrend. And second is the 61.8% Fibs applied to the 9-24 March uptrend.
Simultaneously, the price has rejected the 200 Exponential moving average, suggesting the validity of the downtrend. As long as the 108.00 resistance is holding, USD/JPY is expected to move down towards one of the Fibonacci retracement levels. Altogether, there are tree downside targets. 50% Fibs at 106.70, 38.2% Fibs at 105.40 and 23.6% Fibs at 103.78. Each one should be monitored for either a breakout or rejection especially the nearest Fib support.
Bias: Strongly bearish while below 108.05
Potential Resistance Zone: 107.60 – 108.00
Potential Targets: 106.70, 105.40, 103.78
Have a profitable trading!