Daily Price Action

USDJPY Shorts Favored Below 108.40


On December 30th, I wrote that the future direction for USDJPY hinges on 108.40.

Notice how the pair has caught a bid here since mid-November.

I also pointed out the price structure of the pair in the December 30th members-only video, namely the recent swing highs and lows.

The way the USDJPY was struggling to carve higher highs hinted at a possible pullback.

Furthermore, the pair had recently tested the trend line that extends from the November 2018 high.

I discussed this trend line in the December 21st forecast video.

All of this pointed to the potential for a pullback.

But the 108.40 support level stood in the way of a deeper correction.

While we still need a daily close below 108.40 to confirm the breakdown, the USDJPY looks ready to retest 106.80 in the coming days.

Remember that the “daily close” for me refers to 5 pm EST.

Go here to get access to the same New York close charts I use. These charts will give you five 24-hour sessions each week.

Notice too how the pair bounced from this 108.40 area on Thursday.

That’s a clear sign that the market is paying attention to this level, and that a daily close below it would be significant.

Just remember that there are no guarantees.

Although a daily close below 108.40 would signal weakness and also expose 106.80, it doesn’t mean it will happen.

There’s always a chance it could be a false break.

But for now, I’ll treat this first lower low since August 2019 and pending close below 108.40 as signs of a bearish reversal.

Key support levels on the way down include 106.80 followed by 105.00.

Alternatively, a daily close back above 108.40 would negate the bearish outlook and re-expose the November 2018 trend line near 109.50.

Want to watch the USDJPY video I just released in the member’s area?

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USDJPY trend line resistance and horizontal support

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Justin Bennett says

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Isiyaku Ibrahim says

Thanks Justin

Henryk says

Super Justin ok.

Daniel Sumomba says

It is very good analysis,
How about USDCAD could you give comment on price action right now

Henry.o says

Based on USDJPY in a HI chart,there is no much force pushing the trend up,the bull and the bear are fighting. The down trend will still take over but don’t know the extent.

Matthew says

It’s now 5 January and it looks like the Daily has closed below 108.40!
I am only now reading this, but so glad I am on the right side of the market!
This just confirms it.
Thanks Justin for your analysis!

gyoseongkim says

What do shorts mean?

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