Not only is USD/JPY sitting on solid supports but USD/JPY is the currency pair holding progress to other pairs and forcing range trading conditions. The JPY view as well includes major cross pairs in EUR/JPY and GBP/JPY as both sit severely oversold on vital supports. Its do or die for JPY and its JPY to decide how to proceed in days ahead.
USD/CAD broke its support at 1.3180, USD/CHF 0.9986, USD/NOK 8.37, USD/SEK 8.87 and USD/ZAR at 13.66. A higher USD/JPY could easily drag mentioned pairs higher to break its resistance points yet a lower JPY would lend much support to the risk pairs in EUR/USD, GBP/USD and any pair arranged as Other Pair/ USD.
For this day, USD/JPY major break points are located from 113.28 and 111.49, a paltry 79 pip range. The problem against 111.49 is 111’s are loaded with supports starting at 111.93, 111.88, 111.85, 111.77, 111.60. The 111 supports travel down to 111.53 then 111.49. Its the 111.49 point to break in order to see 110.51, 110.13 and 110.01. For today and next days, lower 111’s and 110 will require a rocket ship to break through.
Despite mentioned break points, the commonality in USD/JPY and all currency pairs is range breaks for most pairs are a good distance away. USD/JPY for example range breaks are located from 110.50’s and 114.60’s. Even if 113.28 or 111.49 breaks in days ahead, both points represent average market levels rather than range breaks. Range breaks in currency trading are always more important. The best a 113.28 break could achieve is 113.39 and no threat to a 114 range break.
On the topside, USD/JPY contains points from 112.23 to 113.01. We’re looking for a bounce if get it to 112.90’s but USD/JPY due to its break point location is treated with extreme caution.
Viewed from severely oversold EUR/JPY, 120.36 and 119.60 are vital points. GBP/JPY, 140.44 and 138.65. JPY will decide how we travel this week.
Brian Twomey, Inside the Currency Market, btwomey.com