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108.90 major weekly pivot: USD/JPY technical analysis

By Nathan Batchelor

USD/JPY technical analysis highlights the 108.90 level as a pivotal area this week. Weakness under the 108.90 could prompt yet more weakness in the pair, and possibly an attack towards the 104.50 level.

The US dollar staged a major reversal against the Japanese yen currency last week as traders flocked to safe-haven asset classes.

USD/JPY analysis shows that the major trendline support on the daily time frame, at 108.90, is likely to act as a major pivot point this week.

USD/JPY medium-term price trend

Unprecedented levels of market fear caused the USD/JPY pair to plummet lower last, with traders flocking to the safety of the Japanese yen currency.

USD/JPY technical analysis over the medium-term shows that weakness below the 108.90 level could cause the pair to slump towards the 107.40 level.

The daily time frame shows that major trendline support is located around the 108.90 level, and will likely act as a major pivot point this week.

Sustained weakness below the 108.90 level could cause a more protracted slump in the USD/JPY pair towards the 107.50 and 106.00 levels.

Traders may be cautious if price starts to hold above the 108.90 level as the USD/JPY pair could stage a counter-rally back towards the 110.00 and possibly the 110.70 levels.

USD/JPY short-term price trend

Short-term USD/JPY technical analysis highlights that sellers are in control of the pair while price trades below the 109.88 level.

The lower time frames continue to show the existence of a bullish inverted head and shoulders pattern. Short-term USD/JPY bears need to move price below the 104.50 level to invalidate the bullish pattern.

Looking at the downside potential for the USD/JPY pair if the pattern is invalidated, a major drop of around 800 points could follow.

Overall, traders have few reasons to be bullish towards the USD/JPY pair over the short-term at current levels.

USD/JPY technical summary

USD/JPY analysis indicates more losses ahead for the USD/JPY pair while price trades above the 108.90 level. The 104.50 level remains the likely downside target if the 108.40 level is breached.

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