Yen continued lower from Monday’s selling during early Asian session. Price threatened to break below L4 heading towards L5 but was supported by 80.0 round number. Currently trading just below L3 of 0.8165, we could see resistance zone from here to 80.2 preventing bulls from pushing further.
Break above L3 will bring back trading range of 80.4 – 80.6 into focus, while a drop below 80.0 will signal potential drop back to L5 and further downside 79.2.
Stochastic indicator on the daily chart also suggest a potential top forming. However the sell signal is not yet confirmed as the Stoch indicator hasn’t hit below 80. The imperfection of Stoch indicator is that price could indicate overbought/oversold levels for an extended period of time ( see Stoch levels between 16-25th Oct ). As such, bears may want to prepare for the possibility of price testing back 80.6 once again.
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