- USD/JPY has fallen to a key low; if it breaks and closes below it, it could threaten the uptrend.
- Such a move would likely increase the odds in favor of the bears.
USD/JPY is testing support at key lows from where it bottomed and pulled back during August. If the price breaks below these lows again, it could risk signaling a reversal of the long-term uptrend and suggest a major bearish shift in the technical outlook for the pair.
USD/JPY Daily Chart
The pair has already broken below an important multi-year trendline, suggesting that the long-term uptrend has been undermined. However, to confirm a reversal, the price would need to break and close (on a daily or preferably weekly basis) below the August 5 low at 141.69.
Strong support lies at 140.25 (December 2023 low) and this could halt the pair’s decline. A break below that level would also provide further confirmatory evidence of a reversal in the trend.
Since it is a tenet of technical analysis theory that “the trend is your friend,” establishing the direction of the trend helps forecast where the price is most likely to go next, so such a breakout would increase the odds of further downside developments in the future.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
