USD/JPY: bulls run out of steam and price drops below key 111.80 support

Ross J Burland FXStreet

Currently, USD/JPY is trading at 111.76, down -0.01% on the day, having posted a daily high at 112.01 and low at 111.73.

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USD/JPY has been capped as Tokyo decides enough is enough of the dollar strength. The price is moving away from the highs and testing down below the 111.80 support. This is the cloud top & 38.2% Fibo at 111.82 area that is a significant level. The yen was subject to risk-on trade on Wall Street due to the White House's budget plans putting the Trump trade back into effect. However, the dollar is not out of the woods yet but a resumption of the bid would bring the 50% & Kijun level at 112.32 as the next target to the upside on a reversal.

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USD/JPY levels

For the downside to persist, a close below Monday's 110.85 low would be significant. Meanwhile, Valeria Bednarik, chief analyst at FXStreet explained that, technically, the 4 hours chart shows that the price has settled midway between the 50% and the 61.8% retracement of the latest bullish run, while moving averages remain flat. "The risk remains towards the downside ...The bearish pressure will likely ease on a break above 112.00, but gains are hardly expected to extend beyond 113.00 this week.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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