- USD/JPY witnessed selling for the second successive day and dropped closer to the weekly low.
- The overnight break through an ascending trend-line and 200-hour SMA favours bearish traders.
- Mixed technical indicators warrant some caution before confirming a near-term top for the pair.
The USD/JPY pair extended its retracement slide from the 137.00 mark, or a fresh 24-year high touched on Wednesday and witnessed heavy selling for the second successive day on Friday. The corrective slide dragged spot prices back closer to the weekly low, though bulls showed some resilience below the 135.00 psychological mark.
Given the overnight breakdown through a two-week-old ascending trend-line, subsequent weakness below the 200-hour SMA was seen as a fresh trigger for bearish traders. The latter, currently around the 135.70 region, capped the USD/JPY pair's intraday recovery move and should now act as a key pivotal point for short-term traders.
Technical indicators, meanwhile, are holding deep in the bearish territory on hourly charts, though are still far from confirming a negative bias on the daily chart. This makes it prudent to wait for strong follow-through selling before confirming that the USD/JPY pair has topped out and positioning for any further depreciating move.
From current levels, any further decline below the 135.00 mark is likely to find decent support near the mid-134.00s, which if broken would trigger a fresh wave of technical selling. The USD/JPY pair might then weaken further below the 134.00 round figure and accelerate the fall towards testing the next relevant hurdle near the 133.60 area.
On the flip side, momentum beyond the 135.70 area (200-hour SMA) now seems to confront some resistance near the 136.00 round-figure mark. Any further recovery is more likely to attract fresh sellers and remain capped near the aforementioned ascending trend-line support breakpoint, now turned resistance, near the 136.35-136.40 region.
USD/JPY 1-hour chart
-637922727432240174.png)
Key levels to watch
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.
Recommended content
Editors’ Picks
EUR/USD retreats toward 1.0650 after PMI-inspired rebound
EUR/USD loses traction and retreats to the 1.0650 area after rising toward 1.0700 with the immediate reaction to the upbeat PMI reports from the Eurozone and Germany. The cautious market stance helps the USD hold its ground ahead of US PMI data.
GBP/USD fluctuates near 1.2350 after UK PMIs
GBP/USD clings to small daily gains near 1.2350 in the European session on Tuesday. The data from the UK showed that the private sector continued to grow at an accelerating pace in April, helping Pound Sterling stay resilient against its rivals.
Gold flirts with $2,300 amid receding safe-haven demand
Gold (XAU/USD) remains under heavy selling pressure for the second straight day on Tuesday and languishes near its lowest level in over two weeks, around the $2,300 mark in the European session. Eyes on US PMI data.
Here’s why Ondo price hit new ATH amid bearish market outlook Premium
Ondo price shows no signs of slowing down after setting up an all-time high (ATH) at $1.05 on March 31. This development is likely to be followed by a correction and ATH but not necessarily in that order.
US S&P Global PMIs Preview: Economic expansion set to keep momentum in April
S&P Global Manufacturing PMI and Services PMI are both expected to come in at 52 in April’s flash estimate, highlighting an ongoing expansion in the private sector’s economic activity.