Forex: USD/JPY retesting BoJ low at 88.36; break paves way to 87.80

FXstreet.com (Barcelona) - The bearish potential for USD/JPY increases short term, says Valeria Bednarik, chief analyst at FXstreet.com. Presently, the pair has been hit by severe selling again ahead of Tokyo, sending the spot rate dangerously close to its post-BoJ lows at 88.36. Once below, Jan 16 swing low at 87.80 looks poised to be tested.

"The hourly chart shows price was unable to recover beyond 200 SMA, now offering dynamic resistance around 89.10, while indicators head south below their midlines, keeping the downside exposed. In bigger time frames such as 4 hours and daily, indicators also head lower, with daily ones also favoring a bearish corrective movement" Valeria notes.

Valeria adds: "Key support now is at 87.80 area, and if price does not bounce there, then there’s scope for a continuation towards 86.40/60 area. In the short term, daily low of 88.35 is immediate support and if broken, 87.70 comes at sight for today."

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