The dollar is looking a little edgy
USDJPY has broekn down under 111.00 to a low of 110.90 and dollar strength elsewhere starts to weigh.
USDJPY daily chart
There’s some potential to see a fast drop to the mid to low 110’s before we hit the next bunch of support. That comes from a barrier at 110.00 but ahead of that we have support at 110.20, the 55 WMA at 110.25 and the 55 MMA & 61.8 fib at 110.14. That’s a fair bit of support to lean against both for new longs and shorts to take some profit at. The rally sell trade is in full force, especially with the overnight resistance hitting the former support area around 111.70.
The picture isn’t overly clear though. While EUR & GBP have reacted to USD weakness, other USD pairs aren’t playing ball so much. It looks like a lot of this is being yen led. We can only trade what’s in front of us though and if 111.00 becomes resistance now, shorts may look to take it lower again.
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