USDJPY is in a dynamic downward trend, where after breaking the key support zone within 108.30 the rate slid to the next level of defence around 105.50.
As can be seen on the weekly chart below, quotes for the fourth week are struggling with support at 105.50, which so far effectively restrains the intentions of sellers.
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Is there a chance to test the area again at 108.30, but this time as a resistance? Answers can be found at the lower interval, in this case 4-hour. As the chart indicates, the buyers during the first four hours of the session managed to break the local resistance close to 106.46 and the downward trend line running from this year’s highs. It seems, therefore, that this breakthrough, unless it is negated by the end of the session, opens the way for increases towards 108.30.
In addition, it is worth noting that the overnight upward movement realized almost the entire average range from the last 14 days. It is possible that the quotations will now correct this increase and retest the area at 106.46 as new support.
Higher volatility on the USDJPY pair can still be expected today at 14:30. Then we will get data from the American labor market, which undoubtedly is awaited by market participants.
