Friday, July 06, 2018

The USD/JPY Depreciation May Continue Next Week

After multiple attempts to break out above 110.70 – 110.80 and after the poor NFP data today, USD/JPY renewed its depreciation, reaching 110.376.

110.30, however, is a strong support for the USD on the D1 time frame and the pair has been testing it for three days now without being able to break out below it. I doubt there will be a breakout until the end of the trading week today. I do expect, however, that next week those attempts will continue and in case there is a breakout and the price remains below 110.20  there could be another drop to 109.90 -109.80.

The alternative scenario is in case the pair fails to break out below the support – it could renew its upward movement and test the resistance at the trend line of the channel (marked in red).