USDJPY D1 10 28 2020 1954

A three week decline takes price back into this critical support barrier for the third time in as many months and we’re looking for inflection off this threshold. A break / weekly close below would be needed to mark resumption of the broader downtrend towards the 78.6% Fibonacci retracement of the March rally at 109.60. Weekly resistance now stands at the March channel line / October high-week close at 105.59- a close above this threshold would be needed to shift the medium-term focus back to the topside in USD/JPY with subsequent resistance objectives eyed at 106.00 and 107.02.

A downside break of the October opening-range in USD/JPY takes price into a critical support pivot ahead of the monthly close. From a trading standpoint, a good zone to reduce short exposure / lower protective stops – be on the lookout for topside exhaustion ahead of 106.00 IF price is indeed heading lower with a close below 104.12 still needed to keep the immediate short-bias viable. Lots of event risk on tap heading into the US Presidential Elections next week - stay nimble here and look for inflection off this zone. 

 

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