Technical Analysis – USDJPY loses additional ground in trading range

USDJPY has dropped beneath the converging simple moving averages (SMAs) but the picture remains neutral. The sideways trajectory of all the SMAs is not conveying any clear directional preference in the pair.

Currently the short-term oscillators are slightly skewed to the downside. The MACD has nudged just underneath its red trigger and zero lines, while the RSI’s negative bearing seems to be taking a breather. That said, the stochastic oscillator’s negative charge remains intact, promoting extra negative price action in the pair.

If sellers manage to retain the upper hand, they may initially target the support section of 109.11-109.21, formed between the lows in mid-August and mid-September. Diving deeper, the price could challenge the support foundation of 108.55-108.72, which held up in May and early August. Sinking from here, the pair could then hit the 108.33 troughs from May 7 and 11.

If buying interest picks up, resistance could commence at the mid-Bollinger band at 109.66 ahead of the 50-period SMA at 109.77. Another thrust up would need to conquer the entangled 100- and 200-period SMAs at 109.91 before buyers can attempt to reinforce upside momentum by conquering the resistance barricade of 110.00-110.16. Overstepping this could boost buyers’ confidence to challenge the 110.36-110.54 resistance ceiling.

Summarizing, USDJPY remains neutral in the short-term timeframe between the limits of 108.72 and 110.80. A break either below 109.11-109.21 or above 110.00-110.16 could fuel a new price direction.

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