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USDJPY Downside Risk to Intensify Below 100.75

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USDJPY is flirting with a major support level at 100.75 and is at risk of further losses should the pair close below it. This comes after being down more than 2,500 pips since the 2015 high at 125.85.

To find out why this area is so important, we have to go back to the 2011 low at 75.55. If we draw our Fibonacci levels starting at this low and end with the 2015 high at 125.85, we can see that the 50% Fibonacci level comes in at 100.75.

USDJPY weekly chart

Not only is it the 50% retracement, but we also have two prominent lows from 2014 along with a swing high from 2013 to help define the area.

A daily close below this support level could open the door to further losses. Going back to the Fibonacci levels above, we can see that there isn’t much in the way of critical support until the 61.8% Fibonacci near 95.00, which is also the 2010 high.

However, do note that there are several minor areas of support along the way including the post-Brexit low of 98.80.

Things look relatively quiet next week for the US dollar and Japanese yen, but that doesn’t mean things will be quiet. It seems that these days the unscheduled events or even chatter among policy makers are more of a market mover than the scheduled event risk.

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USDJPY key levels on the daily chart

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