The United States dollar versus the Japanese yen currency pair extended its correction beyond the resistance line of the daily bearish channel.
The correction that started after the materialization of the 104.44 low — which also falsely pierced the important support area of 105.52 and confirmed the 105.00 psychological level — went all the way to the well-known resistance area etched by 108.12, the support line of the ascending rectangle and the resistance line of the descending channel, piercing the latter, confirming as resistance the second, and closing beneath 108.12 but the same time around (at, actually) the 108.00 psychological level.
The piercing of the descending channel’s resistance is a major drawback for the bearish profile. On the other hand, the confirmation of the lower line of the angled rectangle and the move back beneath 108.12 could be considered a small victory for the bears. However, a warning sign that this may be a dead-end road is the fact that the low for August 19 confirmed — at least for now — the channel’s resistance as support. On the other hand, given these two reasons, there is nothing now that can stop the price for making its way up, above 108.12.
So, if the price closes above 108.12 or extends further on to the upside and then confirms it as a support, then 110.27 is the next target, of course with the intermediate 109.00 psychological level. A throwback towards 106.92 is also possible, with the same targets.
The price is in an ascending movement and now oscillates above the 107.55 local support.
As long as 107.55 does not get taken away, new visits to 108.49 are to be expected, with the outcome of the latter being pierced and the price extending to 109.12.
Levels to keep an eye on:
D1: 108.12 106.92 109.00 110.27
H4: 107.55 108.49 109.12
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