When we last examined USDJPY, it was spurting up above the bottom of the broken purple channel which had guided its rise from 75 in 2011.  It looked like USDJPY was going to reassert itself as the principle driver of stock prices.  But, it topped out 4 sessions later at a lower high that reinforced a falling channel that’s almost two months old.

continued for members…I’ve been writing about this falling red channel for over a month.  If the trend continues, the next move should be to its bottom.  However, this would establish lower lows.

So, we’ll look first for support at 111.018  — not only horizontal support from 2/11 and 2/24, but the red .886 and the red channel .236 line as well.  If it fails, there’s potential down to the red channel bottom (now 110.35) or even the white .786 at 109.60 (though this works better if it’s out a few months.)

Having said that, the BoJ can and will levitate USDJPY any time they want.  So, a big spike is ALWAYS on the table (usually without any justification other than stocks are melting down.)Stay tuned.