The US dollar versus the Japanese yen currency pair recovered almost the entire depreciation. Will the appreciation continue?
Long-term perspective
The ascending trend that started after the price confirmed the 105.55 support level — and that printed the low at 104.44 — ended after the support line of the channel that limited it got pieced.
The fall was able to reach the level of 101.18, from where a rally commenced, one that recovered almost the entire depreciation.
The recovery facilitated the reentry of the price into the ascending channel, which is a good sign for the bulls. What is interesting to point out is that today’s candle etched its low exactly on the lower line of the channel, thus confirming its role as a support trendline. Of course, the candle is not yet closed and things could change, but is good to note the price action.
If the bulls manage to conquer 110.29, then, although the price may throw some lows towards the support trendline, 111.07 represents a first target. If this level gets pierced and confirmed as support, then 112.25 is exposed.
But even if the price retraces to 108.85, the bulls still have an edge, as this level is part of a support area. In the case of such a development, 110.29 would be a prime target, followed by the other two that were previously mentioned. Only if the price falls below 108.13, it can be considered that the bears took charge.
Short-term perspective
The price is in an ascending trend that started from the low of 101.17. It seems that the bulls confirmed the 109.75 level as support. This allows them an appreciation that targets 110.63 and 111.01, respectively.
But even if a depreciation comes into place, as long as the trendline is respected, further appreciation is possible. In the light of this possibility, the double support crafted by the trendline and the level of 108.43 could be a zone that may spark the next strong leg to the upside.
Levels to keep an eye on:
D1: 110.29 111.07 111.25 108.85
H4: 110.63 111.01 108.43
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