The United States dollar versus the Japanese yen currency pair bounced off the 104.00 psychological level. Who will steer the price from here?
The fall from the 109.85 high, which came after the bulls failed to keep their gains above the 109.08 level, extended beyond the next firm support, 107.00.
However, from there, the bulls were able to bring it back above 107.00, but only for a short while, as the intermediate level of 108.05 forced them to peak at 108.16 and fall once again under 107.00.
This gave the bears the chance they’ve been waiting for, the result being the strong depreciation that crafted the 104.18 low. Once again, the bulls attempted a comeback, but still, the bears would render their efforts futile, as the price confirmed the double resistance area noted by the descending trendline that starts from the 108.16 high and the important level of 107.00.
The confirmation facilitated another downward leg, with the low at 104.00. The history repeated itself, this time the double resistance role being played by the 106.12 intermediate level alongside the same descending trendline.
But this time, the bulls kept the price in check, as the fall was not as strong as the previous ones, halting at 104.02.
If the bulls manage to bring the price above 105.09, then they might build up sufficient energy to overcome the descending trendline, targeting 106.12.
On the flip side, if the 104.02 low is challenged by a new lower low, then 103.15 is the next target.
From the high of 106.10, the price is in a descending trend, as highlighted on the chart.
The price printed the 104.02 low and retraced above the double support defined by the lower line of the descending channel and the 104.44 level.
However, it then slipped back under 104.44. So, if the bears validate 104.44 as resistance by making a throwback, then they could aim for the 104.02 low, followed by — in the light of those discussed for the long-term — 103.15.
Only a fall beneath 104.44 could trigger another fall towards the 104.02 low.
Levels to keep an eye on:
D1: 105.09 106.12 103.15 and the low of 104.02
H4: 104.44 105.27 103.15 and the low of 104.02
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