The last two sessions have been good ones for the Japanese yen against the greenback. On the heels of Wednesday’s downtrend, today’s action has extended the selloff. Thus far, the USD/JPY has dropped over 30 pips toward downside support.

A short signal for the USD/JPY hit its take profit a bit earlier. Currently, there is a fresh long-term signal on the board. If you are interested in becoming active in the yen, it may be a good idea to check it out.

USD/JPY Technicals

The USD/JPY has skipped the FED retracement and is in full control of the bears. The result is several key support levels coming into play for late-week trading.

Big round numbers typically hold a special significance among traders. Both stop and entry orders frequently surround their vicinity. In this case there are several support levels near the 112.00 handle:

• Support(1): Daily SMA, 112.00
• Support(2): 62% retracement of current wave, 111.94

The 112.00 area will be a key indication of upcoming price action. If the USD/JPY breaks hard beneath this level, then a test of the swing low at 110.83 is highly likely.

U.S. Overnight Events

It has been an active week on the newsfront, with fundamental market drivers shaking things up regularly. The coming 24 hours are pretty tame:

Country           Event

Japan              Tankan Index

Eurozone        Trade Balance

U.K.                 Bank of England (BOE) Quarterly Bulletin

U.S.                 Capacity Utilization

If you are engaging the USD/JPY, keep an eye on the Tankan numbers. The report is not likely to spark a major trend, but participation may spike if there is a big surprise.

Tomorrow marks the end of another trading week. Let’s finish it strong!