The United States dollar versus the Japanese yen currency pair seems to be under undeterred bearish dominance. Are the bulls just around the corner?
The fall that started at 109.85 sent the price — in the first instance — to the 106.07 low, which is under the firm support level of 107.00 — a psychological level.
Because of this, the point that the price returned above 107.00 was of little importance for the bears. This is because, as a result, they found out they have the power to put their plans into practice.
As a consequence, the bullish comeback attempt managed only to craft the 108.16 high, which later would serve as the starting point for a falling trendline.
Similarly, the bearish confidence was also expressed in the form of the descending trend that took shape and thoroughly respected the trendline.
The trend extended until the 103.15 level, stopping a hair away from it before challenging the double resistance defined by the trendline and the 105.09 main level.
Still, the bears took care of the situation, sending the price to the 103.65 low. Following are two highs — only the second one, 104.75, is labeled — that did not come close to attempting to conquer 105.09.
If the 103.65 low becomes support, then any rise may be limited, as it would be seen by the bears as a new opportunity to join the market.
Unless that happens, the price has room for further decline, 103.15 being the first profit booking area for the bears.
Only if 105.09 is captured by the bulls, then 106.12 could be the next stop.
The fall from 105.67 extended until the 103.65 low, bringing the price under the 105.27 intermediary level, beneath the upper line of the falling channel, and in the bearish territory marked by the 104.44 resistance level.
From 103.18 to 103.82, the lows are higher lows. On the other hand, 104.76 and 104.75 are at the same high (even if, strictly, the second is a lower high).
So, considering that the price falsely pierced 104.44, an event noted by the 104.75 high and which aided to the formation of the 103.67 lower low, after a very bearish return within the falling channel, the bears are expected to continue their domination.
So, unless 104.44 is validated as support, which opens the door to 105.27, as long as the price sits under it, 103.09 is the next bearish objective.
Levels to keep an eye on:
D1: 105.09 103.15 106.12
H4: 104.44 105.27 103.09
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