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USD/JPY testing a long term descendant trend line - FXStreet

FXStreet (Łódź) - As FXStreet Chief Analyst Valeria Bednarik indicates, the USD/JPY is in the 104.90 area on Tuesday, testing a long term descendant trend line coming from the August 1998 high of 147.68.

Key quotes

"Whilst the pair needs to close the month above it to confirm the break, the fact is that a price extension above it could be a game changer for the USD/JPY that traded in a 500 pips range since the year started."

"For the upcoming days, the level to watch will be then 105.43, this year high set in January."

"A break above it should be enough to confirm a long term upward continuation, towards the 108.60/80 price zone, where the pair has several monthly highs and lows."

"But what happens if price fails around 105.00? Then the strength of the line will rule, and support a downward correction, towards 102.70/103.30 area."

"Shorter term, the 4 hours chart shows indicators exhausted in extreme overbought territory, but the USD/JPY is not a pair that usually cares about it when is on a directional move: a break above 105.10 should lead to a test of mentioned year high of 105.43, while below 104.60 the pair can correct down to 104.20 price zone."

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