USDJPY trades at lowest level since Jan. flash crash day
The low did test a lower trend line on the daily chart in the USDJPY
The USDJPY trades to the lowest level since January flash crash day (Jan4 low was at 107.507). The low today reached 107.46 so far. On the daily chart below, there is a lower trend line at 107.41. That level is a key borderline for the bulls and the bears (and the last line in the sand for buyers). Stay above it is more bullish. Move below and the door opens for more selling.
Drilling to the hourly chart below, the run lower today had a couple of bearish moves.
- The high today stalled against the old floor at the 108.16 level . Bearish.
- The pair tumbled below the 107.809-879 swing area (see blue circles). Bearish.
- THe correction off the daily trend line support hold (against 107.41), found sellers against the swing area at 107.809-879. Bearish.
We are back down and trading at the 107.53 level. We know from the daily chart that the 107.41 is the last line in the sand to hold.
So, although the bears are in control and sellers/shorts from above can hold on below the 107.879 level, I would expect that buyers would lean against that trend line at 107.41 with stops if the price action shows more willingness to stay below that level (give it a few pips for dip buyers).
Sellers from above who like the pair moving lower, could take partial profit and reestablish on a break below. The point is, the 107.41 is a key level.