The USDJPY pair has surrendered much of Wednesday’s strong gains, after North Korea threatened to detonate its most powerful Hydrogen bomb yet, into the Pacific Ocean. Investors have moved back into the safety of Japanese Yen, and away from riskier asset classes.
During the Asian session, the pair has fallen from the 112.55 level, finding critical intraday support from its monthly pivot point, located at 111.65.
Traders should watch the 110.67 level, which denotes the pairs inverse head and shoulder pattern neckline. A series of higher time frame price closes beneath this level, should be seen as strongly bearish.
Key USDJPY technical support below the 111.65 level is found at 111.57, 111.49 and 111.20. Below 111.20, price should further decline to 110.87 and 110.68.
To the upside, intraday USDJPY resistance is found at 111.90 and pairs the 50-hour moving average, at 112.07. Further resistance above 112.07 is found at the daily pivot point, at 112.42 and the current weekly price-high, at 112.71
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