Our USDJPY forecast sees the pair currently trading in the red at 110.81 at the moment of writing but is located below 110.92 today’s low, down 0.13%.
The pair has rebounded as the DXY has managed to bounce back. Still, the pressure is high and the pair could resume its decline if the DXY and JP225 drop again.
The pair is into a corrective phase after reaching 111.65 level. This could be only a temporary drop. USD/JPY could test and retest the downside obstacles before jumping higher.
The US ISM Services PMI could bring strong moves in USD/JPY today. The indicator is expected to drop from 64.0 to 63.4 points. Moreover, the Final Services PMI is expected to remain steady at 64.8 points.
Personally, I believe that the FOMC Meeting Minutes report could be decisive on Wednesday. The Japanese Average Cash Earnings and the Household Spending will be released tomorrow but I don’t think that these figures will have a big impact on USD/JPY.
USDJPY technical forecast – major support at 110.40
Forex traders will note that USD/JPY is located below the weekly pivot point and under the descending pitchfork’s warning line (wl1). 110.82 is seen as support, dropping and stabilizing below it could really signal a larger decline.
On the other hand, coming back above the weekly pivot point (111.03) could indicate that the decline is over and that the pair may start increasing again. It remains to see how long USD/JPY will stay under 110.96 static support (resistance has turned into support).
Technically, the ascending channel is still valid, so we could search for new long opportunities when the correction ends. The S1 (110.40) and the uptrend line represent major support levels. It’s premature to talk about a potential drop towards these targets as long as it stays above 110.82 support.
If you are interested in taking an automated approach to trading then you may be interested in our guide to Forex Robots.
Looking to trade forex now? Invest at eToro!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Share
