- USD/JPY fades bounce off eight-day low as 50-DMA challenges corrective bounce.
- Impending bear cross on MACD, steady RSI favor continuation of the latest downside.
- 100-DMA, 3.5-month-old ascending trend line appear tough nuts to crack for Yen pair sellers.
USD/JPY drops back towards the lowest levels in a week, mildly offered near 133.55 by the press time, as it defends the previous day’s downside break of the 50-DMA amid early Wednesday.
Adding strength to the bearish bias is the steady RSI (14) line around the 50.00 level, as well as the looming bear cross on the MACD indicator.
With this, the Yen pair is all set to revisit the eight-day low marked on Tuesday around 133.35. However, the 100-DMA support of near 132.90 could challenge the USD/JPY bears afterward.
In a case where the quote remains bearish past 132.90, an upward-sloping support line from the mid-January, close to 131.90 by the press time, will be the last defense of the Yen pair buyers as a break of which could open doors for the pair’s fall towards the yearly low of near 127.20.
Alternatively, a daily closing beyond the 50-DMA level of 133.80 becomes necessary for the USD/JPY buyers to take the risk of fresh entry.
Even so, the latest swing high around 135.15 and a horizontal area comprising multiple levels marked since November 2022, surrounding 133.45-70, will be a tough nut to crack for the Yen pair bulls.
To sum up, USD/JPY remains on the bear’s radar with the 50-DMA breakdown.
USD/JPY: Daily chart
Trend: Further downside expected
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Read More
The USD/JPY currency pair appears to be exhibiting bearish tendencies with indications of the price falling further. This is despite a strong rally that took the pair to a two-week high of 135.89 last week. In the current scenario, the Yen bears seem to be aiming at a weekly low around 132.90.
From technical analysis, the USD/JPY pair has failed to hold to its gains and is trading near its lowest levels since mid-April. The pair appears to have already broken down a major support level of 134.75, bringing the 20-day moving average and the 50-day moving average well within the bearish camp. Moreover, the relative strength index (RSI) has dropped to 49.43, indicating a shift in momentum.
However, short-term technical analysis suggests that the 140.00 level remains a key battling line and any break below this could potentially make the bears much stronger than they already are. On the daily chart, the next main support level is 132.90 and if this is breached it could offer a bearish outlook for the pair.
Going forward, the USD/JPY’s outlook looks bearish and the chances of a break below the 132.90 mark cannot be ruled out. Therefore, for those looking to open a position in this currency pair, it may be best to wait for a clear trend before entering the market.