By: Mike Kulej
Finally, after couple of weeks of trying, the USD/JPY broke through the 84.70 support and made new 15 year low. It dropped 83.58 before a correction set in.
For right now, the rebound from the fresh low is just that – a correction. It is too early to talk about a reversal in the trend, which is still decisively bearish. However, the current price action is testing the 84.70 – 84.80 area. A change of polarity effect – the old support has become the new resistance. With all the attention given to USD/JPY, this is a key level right now. Sellers will be looking to reenter short positions, if this resistance holds, while buyers are hoping to go long on an upside breakout.
The smoothed out price action, using the Three Line Break chart, still shows a strong downtrend with no signs of turning, yet. That could change, if the resistance gives way. What happens here can easily dictate the next intermediate term price swing, lasting a week or two.
