USD/JPY to extend its slide on failure to defend support at 130.40 – SocGen

USD/JPY is approaching potential support zone at 132.50/130.40. The downtrend could extend on failure to hold this support, economists at Société Générale report.

Graphical level at 145 could contain upside

“The pair is fast approaching its next potential support of 132.50, representing the 38.2% retracement of the whole uptrend since 2020. The low formed in August at 130.40 is an important support level. A test of this support could result in a short-term bounce; however, a graphical level at 145 could contain upside.”

“If the pair fails to defend support at 130.40, the downtrend is likely to extend towards 127.30 and 2015 levels of 125.85/124.00.”