USD/JPY Set to Test Double Bottom Support – Good time to Go Long?
On Monday, USD/JPY is trading at 107.690 after having violated the horizontal support level of 108.300, which can be seen on the 4-hour chart. Closing of candles below this level has extended selling bias until 107.250 as the demand for safe-haven assets remains solid.
The Japanese yen is a safe-haven asset, whereas the market also treats the greenback as a safe-haven currency during the time of crises. So, as a result, the dollar index rose sharply from 94.65 to 103.00 in the ten days to March 19. The crash in the equity markets was triggered in the wake of margin calls and liquidity crises, forcing investors to seek safety in the US dollar.
Consequently, the market sentiment remains weak, with the S&P 500 futures currently reporting over a 1% decline on the day. If the risk sentiment worsens, the US dollar will be able to find haven bids again, allowing a bounce in USD/JPY.
USD/JPY- Daily Technical Levels
Support Resistance
107.46 108.77
106.95 109.58
105.64 110.89
Pivot Point 108.27
Technically, USD/JPY has formed a bullish engulfing candle above the 107.230 support area, which can be seen in the 2-hour timeframe. Above this, the pair has the potential to go after the next resistance level of 108.300 before it shows further selling in the pair. The MACD seems to show a bullish crossover, from selling zone to buying on the 4-hour chart. The idea today is to look for selling trades below 108.300 and buying above 107.300. Whereas, a bearish breakout of 107.300 can help us capture a selling position below 107 until 106.350. Good luck!
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