If the USD/JPY pair closes below 107.00 yen, it should enter the "negative phase". While market participants expected by and large that a rally above 109 yen would be unsustainable, the fall in the end to a minimum of 107.25 yen still became a big surprise. A sharp move is likely to push the dollar to new lower trading ranges, although a strong recession, resembling the recent one, is unlikely. There is a reason to expect a wider and lower range at 106.80 / 108.00 yen per dollar.
What to expect in the next one to three weeks? A sharp sell-off of the dollar overnight is likely to stimulate reposition to further reduce the USD/JPY pair. While it seems that in this case, the advantage is on the side of a further decline. The recent July minimum of 107.20 yen will be "easy to overcome" but the main test will be to 107.00 yen. In order to understand how much the dollar can fall against the yen, it is necessary to track performance and any delay in this range means that the dollar has entered the "negative phase" after falling to 107.00 yen. On the other hand, resistance is expected at around 107.70 yen and only the recovery of their positions above 08.20 yen will indicate a weakening of pressure on the dollar.
