Nick Nasad
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USD/JPY: A Crossroad At The 103.35 Level

With markets in a pause mode after the volatile and sharp losses to equities last week, the USD/JPY finds itself in an interesting place with a decision to make about where to go next.

  • The pair found support at 101.75, which was a pivot from early December and is likely where there are some cluster of buy orders (as well as stops for longs).
  • Currently the pair tests another pivot at 103.35, which had acted as resistance in the first half of December, and is where prices found resistance this week.
  • At the same time, there's also an upward sloping trendline connecting 2 important lows, which was cracked and is now perhaps a level that could be resistance as well.
  • Therefore, if the pair pops above this 103.35 level, then I can see it moving towards 104.80, the previous high from Thursday, as well as a downward sloping resistance trendline.
  • However, if the pair is unable to move above the resistance at 103.35 then, its likely that it will move back towards 101.75.
  • If it does so with renewed vigor, then that level may give way, which would accelerate the downswing as stops would get triggered and bears pile in. Somehow, I don't see that scenario yet, unless we get some new catalyst that triggers further risk aversion.
  • Somehow,