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USD/JPY: Sellers break crucial trendline support, but buyers are not out for the count yet


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USD/JPY broke this year’s upwards trendline on Friday


ForexLive

After several tests this month, sellers finally won out on Friday as stocks were a drag and that helped to move USD/JPY lower and break below the upwards trendline support that stretches out to March this year.
The break is a crucial one in terms of technical levels but buyers are not ruled out of the game just yet. Just below it, the 100-day MA (red line) helped to provide some daily support to keep the overall upside momentum somewhat intact still.
Until sellers crack that level, buyers can still lean on it for support to recapture momentum back to the upside – should risk sentiment also support such a case that is.
Looking at the near-term chart:

Sellers still retain the overall bearish bias as price trades below the two key hourly moving averages and they have been leaning on the 112.00 handle as the first line of defense so far today.
Unless sentiment in equities improves quite dramatically, price should range and pivot around the 112.00 handle as it continues to act as a ‘neutral’ point for risk sentiment over the past two weeks.
Markets are still relatively undecided as to whether or not the correction in US equities is going to be much deeper or we’re going to see a possible turnaround at any given time – considering the still solid fundamentals in US economic growth – and that is making for a relatively range-bound sort of trading sentiment for USD/JPY.
There’s still a case for upside as long as the 100-day MA remains intact and unless US stocks turn from correction to a major rout, buyers can still argue their case.
Support– 111.80 (swing region)- 111.59 (100-day MA)- 111.40 (May high)
Resistance– 112.23-36 (100-hour MA, 200-hour MA)- 112.70-75 (swing region)- 112.89 (October high)- 113.17 (July high)

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