The US dollar versus the Japanese yen currency pair dropped after a very nice rally, putting in danger the possibility of further appreciation.
Long-term perspective
After the apparent false break that printed the high of 108.47, the price rallied from 106.92 to the now double resistance materialized by the lower line of the angled rectangle and the 108.12 level, the confirmation of which occurred.
After this confirmation, the price made a drop that brought the price — at the time of writing — back to 106.92. By revisiting it, the price also reentered into the descending channel, thus making the sellers more avid to join the market.
But as 106.92 — which is the technical correspondent of the 107.00 psychological level — is a respected area, chances are to see bullish attempts to bring the prices up again.
So, if a false piercing of 106.92 does occur, then the price has big chances to pass 108.12 and stop — at least after the first run — at 108.89. It is also possible for the price to etch a symmetrical continuation pattern — like a symmetrical triangle or a range — limited by 106.92 as support and 108.12 as resistance, one that could propel the price towards 110.27.
Only a break of 106.92 — followed by a confirmation of it as a resistance — can shift the direction towards 105.52.
Short-term perspective
The price is at the double support crafted by 107.08 and the lower line of the ascending channel. As for the daily chart, as long as it falsely pierced or confirmed as support, the way to 108.49 is open, the second pitstop being 109.12.
On the other hand, a piercing of the support area, followed by the confirmation of it as a resistance, opens the possibility for a retest of 105.51 to happen.
Levels to keep an eye on:
D1: 106.92 108.12 108.89 110.27 105.52
H4: 107.08 108.49 109.12 105.51
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