Technical Analysis – USDJPY trapped within bearish area; support at 129

USDJPY faced another rejection at the topline of the four-month-old downward-sloping channel near 131.11, increasing speculation that a new selling wave could start in the short term. The 20-day simple moving average (SMA) was another hurdle.

Monday’s low of 129.00 is currently buffering downside pressures, though the technical signals remain confusing, providing little hope for a bullish breakout. Despite its latest rebound, the RSI keeps hovering within a range below its 50 neutral mark. The stochastic oscillator looks set for a negative reversal, whereas the MACD, although pushing for some recovery, is still well dipped in the negative area.

Meanwhile, the clear bearish SMA crosses keep promoting the negative trajectory in the market.

If the 129.00 base gives way, the bears may push for a downtrend resumption below the previous support area of 127.50-127.21. In this case, the 61.8% Fibonacci retracement of the 114.64 – 151.93 uptrend may attempt to pause the decline near 126.50. If it proves weak, selling pressures may intensify towards the March-April constraining zone of 125.00-124.50, while lower, the price may plummet to meet the channel’s lower boundary seen near 121.50.

In the event the pair exits the channel on the upside at 130.50, closing above the 20-day SMA too, the focus will turn to the 132.50-133.30 bar. There might be another trap nearby, set between the 50-day SMA and the descending line at 135.10. Hence, a sustainable extension above that wall will probably be the key for an advance towards the 200-day SMA and the 38.2% Fibonacci of 137.70.

Summarizing, USDJPY continues to trade within a caution area, facing a bleak short-term outlook. A decisive close above 130.50 is required to reduce negative risks, though only a rally above 134.40 would violate the downward pattern. 

Latest News

Technical Analysis – EURGBP recoups weekly losses; stays below key barrier




Technical Analysis – EURJPY fails to rise above 200-day SMA


Technical Analysis – JP225 cash index could see a sizeable move soon


Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.