USDJPY Docks on a Crucial Support After Falling off a Cliff
14 November 2022
USDJPY has fallen over 1300 pips since establishing a new long-term high at the end of October!
On the way we had an intervention from the Bank of Japan. Most recently, we had negative information for the USD; lower inflation, which is probably only a negative for the USD because I think almost everyone in the world would like to see it falling or at least stop growing.
A decisive reversal on the USDJPY is a fact and last week it brought us two technical successes.
The first one was the breakout of the horizontal support on the 145 (orange) on Thursday and the second was the breakout of the mid-term uptrend line (connecting higher highs since March) on Friday.
The drop allowed the price to check in on the 139 (green), a very important support, which was set by the highs in July. This is where today’s correction started, and it’s the place where sellers can back off a little bit and take some profits.
Coming back to the main bullish trend is kind of out of the question right now, the reversal was quite strong and it isn’t going to be the last word from the sellers.
In my opinion, the long-term sentiment switched to a bearish one. For now, we can have a short-term bullish correction but further down the line, the price can possibly break the 139 support and drop further towards the 38,2% Fibo and to 130.5 (yellow), which was a crucial level in April, May, June and August.