USDJPY is trading around 108.92. Price is pulling back after making a double top around 109.70 where we find also the 61.8% Fibonacci retracement of the decline from 110.90 to 107.50. Price so far continues to respect a key trend line support and as long as we trade above it, bulls have hopes of recapturing 110.
Blue lines -Fibonacci retracements
Support by the red trend line is at 108.55 area. Resistance from the double top is at 109.70. If price holds support and turns higher we will have a sign of strength. Breaking above 109.70 will be a bullish confirmation as the price resistance at 109.70 is already confirmed resistance. If support at 108.55 area fails to hold and price moves below it and stays below it, then we should not rule out a deeper correction towards 106. The red trend line support has proven strong so far as it has been tested several times before. Breaking it will be an important sign of weakness.
