USD/JPY has come up a lot recently. This forex pair found strong support at the major 108-109 support area. Buyers have activated this area and sent USD/JPY jumping many times these few weeks.
But, the sellers have always returned stronger. They have kept the selling pressure constant in this pair. In fact, they have jumped in at a lower level every time, making lower highs. When a pair keeps making lower highs, the market sentiment is bearish. If it can’t make new highs, it will surely make new lows.
We have returned to this support area many times over the last several weeks - another bearish sign. If the price keeps pushing against a certain support/resistance level, sooner or later it will give out.
Last Friday, the big support level at 108-40-50 was broken, though 108 remained untouched. That was a warning sign which is why we didn’t open a long-term buy signal here.
This morning, we find USD/JPY below 108, meaning the big support area has finally been broken. Although, there’s one more level which might offer some resistance.
107.30 was the low back in September 2017 so there might be a bounce from there. We will observe the price action when USD/JPY gets down there and might open a small long-trade from there.