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Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
The USDJPY is under pressure again today after gapping down last week.
I wrote about how the pair was at risk of closing below 111.00 at the start of last week.
That was a big moment for the risk-sensitive pair.
Last Monday’s close below 111.00 exposed the next key support at 109.70. That level was tested on Thursday.
However, there was another breakdown last week that flew under the radar unless you’re a member of my site.
Thursday’s close broke a minor ascending channel here.
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You can even see where USDJPY retested former channel support on Friday but never closed back above it.
Here’s the comment I made in the member’s area on Friday:
Today’s gap down is yet another sign of weakness.
If that gap from 109.95 goes unclosed over the next few hours (which seems likely), USDJPY is probably headed to 108.70 and perhaps the 107.60 region.
As for key resistance moving forward, that area between 109.70 and 110.00 is one to watch.
But in case buyers fall flat, last week’s low at 109.45 is a minor resistance level worth keeping on your chart.
Although USDJPY looks set to continue to weaken, it’s important not to chase this or any market.
If you miss this move, so be it. There will always be others.
Even EURJPY is working on its own breakdown this week at 122.60. I wrote about this level on Sunday.
As for USDJPY, as long as the pair remains below former channel support near 110.00, my target over the next couple weeks is 107.60.
Alternatively, a daily close back above the 110.00 handle would re-expose 111.00.
Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...
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