Target 1: 100% of Daily ATR
Target 2: 200% of Daily ATR
The USDJPY has continued to break down through key values of support from last week’s trading pattern. This includes dropping as much as 433 pips, below the July 2015 low at 120.41, to a low of 116.08. From this low price has retraced back to previous support, which is now acting as new resistance. If prices remain under 120.41, this can provide traders to sell with the markets prevailing direction on a retracement. Initial targets may be set using 1x current ATR, which today sits at 130 pips.
Alternatively, if prices rally through resistance, this raises the possibility that the USDJPY is setting up for a broader retracement against this month’s previous decline. This would tentatively delay the execution of any new sell based positioning.