Wednesday’s price action on USD/JPY (a daily chart of which is shown) descended all the way down almost precisely to the 13+ year low in the pair that was just established in mid-December. After hitting this support low (just above 87.00), price was rejected and rose back up substantially. Price action as of Thursday morning has shown the pair displaying much of the same bearishness that occurred on Wednesday. Whether or not the pair is able to break below the 87.00 support is the big question of the week. This is definitely the price level to watch as we end this week and look forward to next week. A break below this extreme support level would have nothing in the way of recent precedent, so further support to the downside is difficult to determine on a concrete basis. A pronounced bounce up off the 87.00 support, though, should meet substantial resistance in the 91.00 region.
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