Where’s the Bottom in the Yen?

The Yen has been on a strong downtrend in recent months, but it appears that we might be forming a base. At Least, for now.

2018 has seen the USD/JPY sell-off hard and there has clearly been a strong correlation between that fall and the plight of the USD.

In the US, ever since President Trump pushed his tax reforms through, we’ve had a very sharp decline. It’s been only recently that the DXY has bottomed out and formed a base. We’ve also started to see similar price action in the Yen.

Key Support and Resistance Levels

Overhead resistance at 108.50 is the importance level for me. If we can pull back above that point we are at the end of the downtrend.

Similarly, support at 106 is crucial. I can’t see us breaking below the lows anytime soon. Despite the strong trend. I feel that we are basing in the Dollar which will make for a tough time should the JPY want to rally.

Rate hikes are on the agenda in the US and unless we see a big flight to safety then I suspect for the time being we will bounce along with the dollar. That is of course unless we see a big fundamental change. Which is possible this week given the data on the horizon.

USD/JPY – 240 min Chart.

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