- Summary:
- Today's dollar weakness was enough to push USDJPY below support of the symmetrical triangle that it was trading in, hinting at more downside potential.
USDJPY is trading lower in today’s trading on dollar weakness and as most equities markets around the world remain closed for Easter Monday. As of this writing, the Japanese yen leads gains against the US dollar as USDJPY is down by 0.74% or 80 pips from its opening price at 107.58.
Download our Q2 Market Global Market Outlook
The 4-hour time frame also suggests that the currency pair may still have room to trade lower. By connecting the recent highs and lows of USDJPY, it can be seen that it was trading in a symmetrical triangle. However, today’s price action has pushed the currency pair below the bottom of the triangle. This suggests that there may be more sellers than buyers in this market. If this assumption turns out to be true, USDJPY could fall to its April 1 lows at 106.91. If support at that price does not hold, the next floor could be at 102.33 where the currency pair bottomed on March 10.
Alternatively, if USDJPY manages to trade higher and close above today’s highs at 108.51, it could hint at the presence of more buyers. This would then invalidate the bearish assumption I presented above. USDJPY may still rally to its April 6 highs at 109.37.