The US dollar versus the Japanese yen currency pair sits in a consolidative phase. What may come after it?
The lift form the monthly support of 101.18 managed to extend until the 111.70 high. By doing so, it also reentered into the ascending channel that starts from the low of 104.44.
But as the price failed to find support after the correction from the peak of 111.70, it dropped, yet again, under the lower line of the ascending channel and thus almost reached the 106.79 level.
The appreciation that followed was not able to conquer the 108.85 level. The result was another fall towards the 106.79 support level. However, at this second run, the bulls were not even interested in lengthening the price above the intermediary level of 108.13, let alone challenge the previous peak — on April 6.
So, the lower highs, coupled with the fact that the price is out of the ascending channel, leads to the price being let to explore sideways movements, which in the end could turn into another fall.
So, as long as the 108.13 intermediary resistance level remains valid, the bears may be very tempted to drive the price to the nearest support level, 106.79, respectively, which also constitutes their first objective. After it, the weekly support of 105.55 comes next.
On the other hand, if the bulls do manage to convert 108.13 into a support level, then they could bring the price to the next intermediary resistance level, 108.85, an area that could be packed with bears ready to join the market at better prices.
After the descending trend that started from 109.10 ended, the price began oscillating in a flat limited by the resistance level of 107.92 and the support level of 107.38, respectively.
If the bulls don’t manage to turn the resistance to support, which, if they do, will give them the possibility to reach 108.43 level, then the message they send in the market would be the one of lack of power or interest to drive the prices higher.
As a result, the bears could then break and confirm as resistance the 107.38 level, an unfolding that will pave the way to 107.06.
Levels to keep an eye on:
D1: 108.13 106.79 105.55 108.85
H4: 107.92 108.43 107.38 107.06
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