The US dollar versus the Japanese yen currency pair seems to be indecisive, but there are some signs that the bears could already be controlling the situation.
The drop from the 109.85 high managed to find temporary support at the 107.00 psychological level. However, the bears were able to resume the fall, driving the price until the 104.18 low.
From 104.18, the bulls recovered in a very convincing way, being able to bring the price, yet again, at the 107.00 firm level. But the bears were prepared for this, so they gave the bulls the welcome they were not ready for, sending the price back to the 105.09 support.
From the 105.09 level, the bulls managed once more to print an appreciation, but their efforts were halted by the 106.12 intermediary level. So, even if the bulls put on the chart a bullish engulfing on August 19, the bears are still attempting to invalidate it.
Nevertheless, this price action could still be favoring the bulls, as if the fall from 106.12 does not end up closing a candle under the lower half of the August 19 candle, the bulls have the needed argument to fuel a new rally.
So, if the bullish engulfing pattern remains viable, then the bulls could put the price above the 106.12 intermediary level, and from there they could head for 107.00 anew.
But if the situation evolves in such a way that 105.09 is confirmed as resistance, then 103.15 could play the role of the main bearish target.
The price appreciated from the 104.17 low until the 107.05 high. But as the price retraced under the intermediary level of 106.77, the bears seized the opportunity to send the price to 105.24, also an intermediary level, piercing the firm 106.02 level in the process.
So, if the bulls are able to reconquer 106.02, then they have a shot for 106.77, which, if conquered, leads the way to 107.34.
On the flip side, if 106.02 remains resistance, the bears can extend the depreciation until the 104.44 firm support level, with 105.27 serving as a partial profit booking area.
Levels to keep an eye on:
D1: 106.12 107.00 105.09 103.15
H4: 106.02 106.77 107.34 104.44 105.27
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