USD/JPY: Is Dollar Yen ready for another leg?
Welcome back to EverythingFX.
Looking at the higher timeframes we can see there has been a lot of pressure to the downside on this pair! The monthly candle engulfing 4 and a half months of prior price action. Dropping down to a weekly we can see price is stalling at the level of support of 108.000.
Starting on a daily and 4-hour timeframe we can see how strong this level of support has been where we have been going sideways for over a week now. We have had a small push up to 108.800 where we rejected immediately off of that zone. I am expecting further downside on this pair however i need to see a break of 108.000 which would be a good indication that the sellers are back in the market. Having a break of support would turn it back into resistance where I would then be looking for a slight re-test before going lower. Our next level of major support is 106.000 which provides us with a 200 PIP trade to the downside which is a great risk to reward upon a retest!
Fundamentally we need to remain cautious with the global economy slowing down would increase the volatility in the pair potentially strengthening the yen and pushing this pair a lot lower. We had Chinese Industrial Production coming in at 5.0% this morning indicating to us that they are being affected by the Trade war with the US. Following a negative NFP l am surprised we had a slow week with the probability of a Fed rate cute increasing. We have retail sales out in the US today which could be the driving factor before the weekly closes! Stay tuned to our market news section as well as our Twitter and Instagram feed for further updates!