In previous posts we warned traders in USDJPY of the increased chances of a reversal from 109.60. In our latest analysis we mentioned the horizontal support at 109.10 that if broken would provide a short-term sell signal targeting at least 108.50.
Blue lines -Fibonacci retracements
Black line -expected size of decline
Red horizontal lines - Fibonacci extension relative to first leg down
USDJPY is now trading at 108.59 very close to the key upward sloping support trend line. In order for our medium-term target of 106-106.50 to be achieved, bears will need to push price below the upward sloping support trend line. Price has made a reversal at the 61.8% Fibonacci retracement as expected. The bearish scenario for a move towards 106-106.50 has increased chances of success now. It will become more possible if the red line is broken.
