Technical Analysis

USD/JPY Poised For Valid Breakdown

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Price dropped significantly on Thursday and looks determined to drop towards fresh new lows in the upcoming period. Is very heavy as the USDX slips lower after the poor US data and because the Yen is boosted by the Nikkei stock index.

I've said in the previous days that the Yen should dominate the currency market if the JP225 will take out the 19700 static support. Nikkei plunged much below the mentioned static support and looks unstoppable on the daily chart. The index could find support at 19278 or lower at the 18936 static support.

USD/JPY is going down as the greenback has taken a hit from the US high impact data, the PPI dropped by 0.1%, even if the traders have expected to see a 0.1% growth, while the Unemployment Claims increased from 241K to 244K, failing to reach the 240K jobs in the previous week.

Price is trading in the red and has managed to drop below the downside line (red line) of the symmetrical triangle and below the 50% retracement level. A valid breakdown from the chart pattern and a retest of the 50% level will confirm a further drop. Price should drop around 700 pips if will breakout from the symmetrical triangle. I don't know if it will drop so much, but a broader drop will come for sure.

Support can be found at the warning line (wl1), but a further Nikkei's drop will help the price to ignore this downside obstacle.

We have important downside targets at 61.8% retracement level, at the 38.2% retracement level and at the second warning line (WL2).

Author: MultiBank Exchange Group Website: http://www.mexgroup.com
MultiBank Exchange Group
Multibank Exchange Group (MEX Group) is a multinational financial derivatives dealer. Established in California in 2005, MEX has offices in several countries around the world, including the US, the UK, Australia and China. Mex Group is regulated by the Australian Securities and Investment Commission (ASIC) in Australia, the Ras al Khaimah Free Trade Zone (RAK) in the United Arab Emirates and the Financial Services Commission (FSC) in the British Virgin Islands.
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