USDJPY ends the sideways trend
Last year ended for the USDJPY in the no man’s land. We were exactly in the middle between the long-term up trendline and mid-term down trendline (red). We can say that it was a kind of a triangle but not the cutest one on the record. 2018 brought some volatility here which allowed changing the sideways trend into a more directional movement.
A bigger action could be spotted on this chart just recently. First, the major downswing was driven by the tapering of the bond-buying program from the BoJ. That was perceived as a positive factor for the JPY. Another information, on the other hand, was negative for the USD. Apparently, China is considering limiting the demand for the US Treasuries. That created a small global sell-off on the Greenback which is clearly seen here with the yesterday’s large bearish candlestick. During the last two trading days, with those movements, we broke two important supports. First one was the long-term up trendline and the second one was the horizontal one on the 112 (green).
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The closest support now is around the 110.9 and it looks like we should get there soon. Before that we can test the 112 again but this time as a resistance. As long, as we stay below the green area, the sentiment is negative and JPY should be stronger.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis