Planning to trade the U.S. dollar this week?
USD/JPY is struggling to extend its recent drop after tagging some key inflection points.
Think we’re looking at a decent area to buy into USD/JPY’s month-long uptrend?
USD/JPY 4-hour Forex Chart by TradingView
The dollar took a hit late last week after sharp downward revisions to May and June jobs data knocked the wind out of it.
Softer labor numbers boosted Fed rate cut expectations and sparked risk-off vibes, sending traders toward safe havens like the Japanese yen.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the U.S. dollar and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
USD/JPY, which had been carving out higher highs and higher lows since late June, tumbled from the 151.00 area to trade below 148.00 before finding enough support to stall the drop.
The pair is now hovering near 147.60, just above the 78.6% Fib of the late July upswing and sitting close to the ascending channel support that’s been holding since late June.
If we see a few more green candles and a clear bounce from this zone, USD/JPY could climb back toward 149.00, maybe even retest the 150.00 handle or the 150.90 previous highs.
But if Friday’s slide picks up steam and price holds below 147.00, we could be looking at a break below the channel that drags the pair toward 146.00 or even 145.00.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
