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USDJPY Pressures Key Support Ahead of Trump Speech

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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.

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Over the weekend I discussed a trend line on the USDJPY 4-hour chart that could expose lower prices if broken. The level extends from the current 2018 low and connects with the mid-April swing low at 106.90.

The trend line also helped supply a bid on Friday. We can see how Friday’s low of 108.64 bounced from the level for the second time since its inception in April.

However, since then the price action has started to weigh on the trend line. Notice how buyers have struggled to move the pair noticeably higher over the past 48 hours.

This type of price action is congruent with what we often see just before a breakdown; something I’ve referred to in the past as “heavy” price action.

Of course, that doesn’t mean we won’t get a retest of the 109.50 resistance area. But even if we do, I’d view it as a possible opportunity to get short. The rejection from 110.00 that transpired between Wednesday and Thursday of last week tilts things in favor of sellers in my opinion.

That said, it’s going to take a close below trend line support to expose lower prices. Those levels include 108.50 followed by 107.40/70.

Perhaps President Trump’s upcoming speech at 2 pm EST will shake things up. In fact, I’d be surprised if it didn’t. Whether the market will view his remarks as bullish or bearish is anyone’s guess, but right now USDJPY bulls have their work cut out for them.

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USDJPY 4-hour trend line support

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9 comments
Jay says

how about USDCAD ? it’s seen to go bull .

Reply
Chris says

Yes I see that, thanks

Reply
Rene says

You wrote:
“However, since then the price action has started to weigh on the trend line. Notice how buyers have struggled to move the pair noticeably higher over the past 48 hours.”

I watch all JPU couples and in the last hours they went up. Is that what you are writing about? What is that behind? Are buyers trying to reverse the trend?

Reply
    Justin Bennett says

    I wrote that buyers have struggled to move the pair noticeably higher. In other words, the inability to move higher from key support suggests an imminent breakdown.

    In fact, the very next paragraph says just that…

    “This type of price action is congruent with what we often see just before a breakdown; something I’ve referred to in the past as “heavy” price action.”

    Reply
      Rene says

      I Understand, thank you.

      Reply
derrick says

thats nice what about eurjpy and eurusd that have had strong down trends today

Reply
Mustafa says

Hello Justin, are we seeing the same pattern in GJ if I’m not wrong?

Reply
    Justin Bennett says

    You mean the one I mentioned on Sunday?

    Reply
Nero says

Does this mean USDJPY is a strong down trend

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