The United States dollar versus the Japanese yen currency pair seems to be delaying further advancement towards the south. Is this really a delay or the bulls took control?
Long-term perspective
The depreciation that started from the high of 111.70 almost touched the technical support level of 106.79, stopping in the psychological 107.00.
Although the fact that the price got under the area defined by the levels of 108.85 and 108.13, respectively, was welcomed by the bears, the bulls seem to be willing to pass this zone and aim for higher prices.
So, if they manage to pierce 108.85 as well and confirm it as support, then their next target would be the double resistance made possible by the lower line of the ascending channel and the level of 110.29. This is a very important area and the reaction with respect to it may very well coin the evolution for the following days or even weeks.
On the other hand, if the 108.85 stands, and gets confirmed as resistance or falsely pierced, then the price could also confirm as resistance the lower boundary of the aforementioned area, 108.13, respectively. If this happens, then the bears would aim for 106.79. If the bulls defend this level, then a flat — limited by the resistance of 108.13 and the support of 106.79 — may come into being.
But if the bears manage to pass beneath 106.79, then the weekly support of 105.55 may be put to the test.
Short-term perspective
The ascending trend that started at the low of 101.17 extended to as high of 111.72. But shortly after, the support trendline was pierced, and so the depreciation reached the level of 107.06. But in the second run, the bears failed to pierce 107.06, which triggered an appreciation that fueled the bullish optimism.
If the bulls are able to confirm 108.43 as support, then their main target would be represented by 109.75, with an intermediary profit booking area at 109.19. If not, then a new fall towards 107.06 is possible.
As previously discussed, this may lead to the formation of a flat (rectangle) limited by 108.43 and 107.06. Being a continuation pattern and preceded by a decline, the expectation would be for the support to give way and, thus, the price to revisit 105.66.
Levels to keep an eye on:
D1: 108.85 108.13 106.79 105.55
H4: 108.43 109.75 109.19 107.06 105.66
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