USD/JPY to plunge towards April low at 107.48 on a break below July lows at 109.53 – DBS Bank

USD/JPY is edging lower from its year-to-date highs of 111.66. According to Benjamin Wong, Strategist at DBS Bank, a break under 109.53 is something to look out for.

A risk-off phase is seeping in

“The market is now selling into prior support turned resistance levels, as signalled by the drop from 111.66. This dropped-down resistance line is now as close as 110.21, with the moving average line around mid-110 as another featured resistance. All this appears to be signalling that a risk-off phase is seeping in.”

“Iit is apparent that USD/JPY is not able to surmount the horizontal resistance connecting 112.40, 112.23, and 111.66.”

“The market currently trades around June 2020’s prior 109.85 peak, but watch out a break of 109.53, the July lows, which should place in sight the 38.2% Fibonacci retracement circling 108.20 and opens the door for the April low of 107.48.”