On Tuesday morning, the dollar/yen pair is trading in the range near the levels from yesterday’s close.
On Monday, the pair advanced considerably as the yen retreated from its previous high. The pair rose mainly thanks to the overall strengthening of the US dollar against the basket of other majors. The demand for American currency among investors has increased.
Besides, the pair faced a correction after moving deeply to the downside. I expect the pair to continue its upward correction in the first half of the day. However, I think that the downtrend will prevail as the pair is still trading in the bear market.
A possible pivot point is seen at 104.85, and I'm going to sell below this level with the targets at 104.15 and 103.75. As an alternative scenario, the dollar/yen pair will move upwards above the level of 104.85. After settling there, it may then test the levels of 105.05 and 105.25.
The USD/JPY pair is trading at the level of 105.70. Meanwhile, the bottom of the zone that is responsible for the reversal of the pair is at 105.60. Taking into account the fact that there is little time left to break through this zone, it is better to refrain from selling the pair as it can easily return above 105.90 from the level of 105.60. Then, the H1 and H4 time frames will show an upward trend. At the same time, the price will not break through the support level of 105.60, where there are the 100 and 200 moving averages. Overall, I’d better not sell the pair, and buy the pair only when it returns above the 105.90 mark with the view of reaching the level of 106.97.