After Yellen failed to halt the USD slide, USD/JPY has continued to follow its recent downward trajectory.
With the bears still in full control of the pair as we head into today’s Asian trading session, lets take a look at some charts.
While you can see the most recent swing low is being tested as I’m writing, the larger support zone below is probably of more significance due to it’s historical significance.
Check out the number of touches dating back twelve months when the level tried to hold multiple times. But lower highs on each bounce was the visual for all the buyers being soaked up before there weren’t any left and support snapped.
Will we see something similar here again a year later?
Zooming into the 4 hourly chart, we can see more recent touches of of the support zone and highlight the swing low that price is currently testing.
Once this level goes, price is at risk of dropping hard into the higher time frame support zone. If this scenario plays out, we would look for the level to hold and then buy any short term retests as price moved back up.
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Dane Williams – @VantageFX
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