Testing key lows, the long-term uptrend is in danger

• USD/JPY fell to an important low – if it breaks and closes below, it could threaten the uptrend.
• Such a move would likely shift the odds more in favor of the bears.

USD/JPY is testing support at key lows from where it bottomed and retreated in August. If the price breaks below these lows, it could risk signaling a reversal of the long-term uptrend and suggest a major downward shift in the technical outlook for the pair.

USD/JPY Daily Chart

The pair has already broken a major multi-year trend line, suggesting that the long-term uptrend has been undermined. However, to confirm a reversal, price should break and close (on a daily or preferably weekly basis) below the August 5 low at 141.69.

Strong support comes at 140.25 (December 2023 low) and this could slow down the pair’s descent. A break below this level would provide further confirmation evidence of a trend reversal.

Since it is a tenet of the theory of technical analysis that “the trend is your friend”, determining the direction of the trend helps to forecast where the price is most likely to go, so such a breakdown would increase the chances of more downsides developing in future. .