In the past year, the USD/JPY has been a boring pair. Unlike other currency pairs, this pair has traded in a narrow range with a high of 115.29 and a low of 107.67.
As shown below, the pair has had a near-perfect horizontal support and resistance.
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Today, the pair erased the gains made in the past five days when the pair moved from a low of 108.39 to a high of 110.48. The pair is currently trading at 108.93.
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The decline is associated with the current global sell off in equities, which started in the United States on Friday.
To predict the future movements of the pair, I used the 6-month chart, which shows the downward pressure may take the pair downwards to the 107.32 level.
(Click on image to enlarge)
An alternate scenario is where the pair bounces back after establishing a double bottom. This could see the pair touch the 108.8 level.
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