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It’s no secret that I’ve been bearish USDJPY for a few months.
Ever since the pair closed below a multi-year level, sellers have been in control.
But despite that breakdown, USDJPY has held up relatively well.
That isn’t too surprising, though, given that the entire market has been at a standstill.
If you recall my last USDJPY post, I pointed out a trend line from the March low.
As you can see from the chart below, the pair intersected with that level at 106.10 on October 7th.
Since then, the USDJPY has come under selling pressure.
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Just keep in mind that sellers need to take out the 104.20 area to expose the 101.00 target I’ve had on my chart for several months.
Given the lower highs since February, a breakdown seems imminent.
On the other hand, if USDJPY bulls were to take out the 106.50 resistance area on a daily closing basis, it would negate the bearish outlook.
That doesn’t seem likely at the moment, though.