The US dollar versus the Japanese yen currency pair looks like it is aiming to start a new appreciation. But isn’t that a little late for the bulls?
After printing the low of 107.65, the price went back above 108.13 and started an appreciation that rendered the piercing of the level as a false one, thus giving the bulls sufficient optimism to be able to reach 110.29.
But from there a strong depreciation came in motion. It was so strong that it affected two potential areas that, if left untouched by bearish pressure, would have served as a good starting point for a new upwards pointing leg.
The first affected area is the one that corresponds to the high of 109.72. It would have been very constructive for the bullish profile if the price had not gone under this area or, even better, if it had confirmed it as support.
The 108.85 level represents the second area that lost part of its potential to facilitate a strong bullish comeback. The reason is that the bulls were not able to take advantage of the candle on January 28, as the low of 108.58 — hence a lower low — was allowed to form.
And even if the price oscillates above 108.85, that does not give credit to the bulls, particularly in the light of the aforementioned facts.
One development that is able to favor the bulls is for them to manage to push the price above the green box — the upper boundary of which corresponds to 109.30, not highlighted on the chart. Until then, the consolidation limited by 109.30 as resistance and 108.85 as support, respectively, is meant to favor further depreciation, 108.13 being the first target.
After the price was not able to sit above 109.75, the bears pushed it towards the south. On this path, 109.19 was not prepared to withstand such pressure and, consequently, gave way.
As long as oscillations take place under 109.19, 108.43 serves as a main target, being followed by 107.92.
On the other hand, if the bulls finally manage to drive the price up and conquer 109.19, then 109.75 is the first stop.
Levels to keep an eye on:
D1: 109.30 108.85 108.13
H4: 109.19 108.43 107.92 109.75
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