The US dollar versus the Japanese yen currency pair looks well contained into the descending trend, a context for which the bears could only be joyful for.
Long-term perspective
Since the end of April 2019, after the price confirmed once more the important resistance area of 112.20, the price materialized a descending trend that, until now, extended as far as 106.92 and by doing so also pierced the important support area of 108.12.
Of course, after crossing 108.12 on June 20, 2019, the price made a new low and, as previously said, confirmed the support of 106.92. The question was if the confirmation will lead to a correction or a shift in direction? In other words, if the appreciation stops at an important resistance, then the expectancy is for the continuation of the downwards move, whereas if it does not stop at an important resistance (or ex-support area), then chances are that the confirmation was a direction changer.
Because the price stopped around a double resistance area, made possible by the 108.12 old support area and the upper trendline of the descending channel, the retracement from 106.92 is seen as a correction that ended with a pin-bar printed on June 27, 2019.
As long as the price oscillates under the aforementioned double resistance area, the way to 105.52 is open. Only the confirmation as support of 108.89 will favor a rally towards 110.27.
Short-term perspective
After the consolidative phase that began on June 4, 2019, the price continued to fall and then retraced in order to make the natural correction.
The retracement extended until the support of the previous consolidative phase, 108.00, respectively. As long as the price confirms this level as a resistance or falsely pierces it, the move to the south should continue, with a first target at 107.08.
On the other hand, if 108.00 is confirmed as support, then the situation is rendered as neutral.
Levels to keep an eye on:
D1: 108.12 106.92 105.52 110.27
H4: 108.00 107.08
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