USDJPY → A retest of trend support. What could go wrong?

11 Okt 2023

USDJPY is forming a correction to trend support amid the corrective movement of DXY (Dollar Index). Logically, on an uptrend, support should push price up, but what could go wrong?



On the daily timeframe DXY is forming a correction to an important support, the reaction could be bullish, thus USDJPY will start to form a rise to resistance. At the moment the fundamental part is quite complicated, with the Fed's tough stance, the dollar is forming a correction under the influence of other levers. So, we will start from the technical analysis.
The currency pair is heading towards the uptrend support, consolidation near this area is confusing and increases the chances of further support breakout. A sell signal (counter-trend strategy) will be the consolidation of the price below the uptrend support line, after its breakout. And the buy signal (trend strategy) will be a false break of the support line.

Resistance levels: 148.9
Support levels: 148,46

The situation is complicated by the fundamentals. From a technical point of view, the price can form a trend growth, but we need to wait for a signal. The setup may break, and in this case the target will be 147.38. Watch the reaction of DXY and USDJPY price to the trend support.

Regards R. Linda!