Down Goes The Dollar?
The Dollar/Yen has been in a downtrend for quite some time. Many traders, myself included, believed that the dollar was headed up. But…when the supply line of the trend channel was reached, prices did just as expected — turn down. As we speak, we have a trading range taking place in the middle of the major trend channel, which I believe is a pullback before further weakness. We can’t say this with any high degree of assurance until the bottom of the range (100.6) is taken out. After that, 99 would be the price level to watch for a potential level of support. If 99 fails to bring in a new wave of buying, this pair could fall much further if the dollar is in a legit bear market. Equally so, if 99 turns out to be a support level, we may be at the start of a new bull market in this pair. One final note — From a really long-term perspective, namely the monthly chart, the USD/JPY’s recent fall may just be a correction.
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