The US dollar versus the Japanese yen currency pair is still to decide about the overall direction.
Long-term perspective
The fall from 111.71 found support in the stable 107.00 level, but even so, the bulls slowly lost their determination, culminating with the confirmation of 108.05 as resistance.
This lead to the price breaking the 107.00 support, extending until the low of 106.35, making a throwback, and departing again from the 107.00 level.
However, this depreciation got stopped in its tracks by the 106.12 intermediary level, from where the bulls began a rally that took the price back above 107.00.
Despite this strong bullish comeback, the same 108.05 level seems to limit any further attempts of marching towards the north.
Given these circumstances, one possible scenario is for the price to fall towards the 107.00 psychological level, confirm it as support, and extend — yet again — until the 108.05 resistance. This could lead to a range trading phase, limited by the two levels.
But, another scenario is also possible. In this one, the 107.00 level gets pierced and confirmed as resistance. Thus, the bears will have another opportunity to start a strong movement towards the south. Of course, their first target is 106.12, with 105.09 being the second.
On the other hand, if the bulls do manage to conquer 108.05, then they can extend their gains until 109.08.
Short-term perspective
The appreciation that started from the low of 105.98, after the 106.02 support level was validated, extended until the high of 108.88.
As the 108.02 level got confirmed as resistance, the price printed a downwards pointing leg until the next support, represented by the intermediate level of 107.34.
But the confirmation of the double support, defined by the 107.34 level and the ascending trendline, was limited, as the price rotated and head on for the support area once more.
However, as long as the 107.34 support level remains valid, the bulls could attempt new rises towards their primary objective, 108.02. But if 107.34 fails to keep its role as a support, then the bears could project the price towards 106.77 and then extend until 106.02.
Levels to keep an eye on:
D1: 107.00 108.05 106.12 105.09 109.08
H4: 107.34 108.02 106.77 106.02
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