USD-JPY: Still Showing Weakness

USD-JPY: Although USD-JPY reversed its intraday losses to close higher on Thursday, while holding below the 91.31 level and within its falling channel, threats remain to the downside. With weakness currently seen, lower prices should develop toward the 90.06 and 89.97 levels. Clearing that, the target would be the 88.82 level, its Oct. 14 high, where a penetration would put USD-JPY in position to head further lower, toward its Oct. 7 low at 88.00. This level serves as a trigger for its ST downtrend resumption.

To avert this risk, the pair must break above its Wednesday high at 91.31 and then toward its Oct. 30 high at 91.51. Further out, its channel resistance, currently at 92.13, comes in as the next upside, where a cap is expected if tested. On the whole, though recovering, it is still vulnerable to the downside in the short term.