USD/JPY Technical Analysis: Bearish Trend Persists
The technical analysis of the USD/JPY pair suggests that the price is currently trending downward, with the 50 day moving average crossing below the 200 day moving average. Yesterday, the price did try to cross above the 20 day moving average but failed. This suggests that the overall trend of the pair is bearish. Additionally, the Relative Strength Index (RSI) is showing a slight upward trend with a negative slope, indicating that the pair is in a period of consolidation. However, the RSI is currently below the midline, which is considered a bearish indication.
The Moving Average Convergence Divergence (MACD) is also showing signs of reversal, with the MACD line crossing above the signal line. However, the distance between the MACD line and the midline is quite large, indicating that there is still a lot of room for the pair to move before reaching overbought or oversold levels.
The USD/JPY pair is currently trading near the daily low, around the 129.75-129.70 region. This suggests that the pair is facing strong selling pressure and may continue to trend downward. The pair's upside is being capped by the emergence of fresh US Dollar selling, as expectations of a softer stance by the Federal Reserve and contraction in the US services sector weigh on the buck. The contraction of the US services sector hit the worst level since 2009 in December, which reaffirms the expectations of relatively smaller rate hikes by the Fed. Additionally, speculations that the Bank of Japan will tighten its monetary policy in the near future is also acting as a headwind for the USD/JPY pair.
Traders are waiting for the release of US consumer inflation figures on Thursday, which will provide more clarity on the Fed's rate hike plans. The US Consumer Price Index (CPI) report should provide some insight on whether the Fed will have to increase its target rate beyond 5% to curb stubbornly high inflation. This, in turn, will play a key role in influencing the near-term USD price dynamics and help determine the near-term trajectory for the USD/JPY pair.
In the meantime, the US bond yields could drive the USD demand in the absence of any relevant market-moving economic releases from the US. Apart from this, the broader risk sentiment will be looked upon for short-term trading opportunities around the USD/JPY pair. Nevertheless, the fundamental backdrop suggests that the path of least resistance for spot prices is to the downside and any meaningful upside is more likely to get sold into. Traders should be cautious and closely monitor the release of key economic data and any developments in the broader financial markets to make informed trading decisions.
The information provided by LewkP is for educational and informational purposes only. It should not be considered financial or investment advice. The analysis presented may not be suitable for all investors. Any opinions expressed in this analysis are solely those of LewkP and do not represent the opinions of any other party. LewkP does not provide financial advice and any analysis provided should not be used as the sole basis for making investment decisions. LewkP does not intend for the analysis to be used for intraday trading. LewkP advises that any trading should only be done with caution and only by individuals who are fully in control of their emotions and have a high risk tolerance. LewkP is not responsible for any losses incurred as a result of using the information provided.
The Moving Average Convergence Divergence (MACD) is also showing signs of reversal, with the MACD line crossing above the signal line. However, the distance between the MACD line and the midline is quite large, indicating that there is still a lot of room for the pair to move before reaching overbought or oversold levels.
The USD/JPY pair is currently trading near the daily low, around the 129.75-129.70 region. This suggests that the pair is facing strong selling pressure and may continue to trend downward. The pair's upside is being capped by the emergence of fresh US Dollar selling, as expectations of a softer stance by the Federal Reserve and contraction in the US services sector weigh on the buck. The contraction of the US services sector hit the worst level since 2009 in December, which reaffirms the expectations of relatively smaller rate hikes by the Fed. Additionally, speculations that the Bank of Japan will tighten its monetary policy in the near future is also acting as a headwind for the USD/JPY pair.
Traders are waiting for the release of US consumer inflation figures on Thursday, which will provide more clarity on the Fed's rate hike plans. The US Consumer Price Index (CPI) report should provide some insight on whether the Fed will have to increase its target rate beyond 5% to curb stubbornly high inflation. This, in turn, will play a key role in influencing the near-term USD price dynamics and help determine the near-term trajectory for the USD/JPY pair.
In the meantime, the US bond yields could drive the USD demand in the absence of any relevant market-moving economic releases from the US. Apart from this, the broader risk sentiment will be looked upon for short-term trading opportunities around the USD/JPY pair. Nevertheless, the fundamental backdrop suggests that the path of least resistance for spot prices is to the downside and any meaningful upside is more likely to get sold into. Traders should be cautious and closely monitor the release of key economic data and any developments in the broader financial markets to make informed trading decisions.
The information provided by LewkP is for educational and informational purposes only. It should not be considered financial or investment advice. The analysis presented may not be suitable for all investors. Any opinions expressed in this analysis are solely those of LewkP and do not represent the opinions of any other party. LewkP does not provide financial advice and any analysis provided should not be used as the sole basis for making investment decisions. LewkP does not intend for the analysis to be used for intraday trading. LewkP advises that any trading should only be done with caution and only by individuals who are fully in control of their emotions and have a high risk tolerance. LewkP is not responsible for any losses incurred as a result of using the information provided.
discord.gg/a7sfTVkgxc
I’m part of a free Discord group where we help each other navigate the market and overcome trading challenges. It’s a friendly, supportive community, with members from around the globe.
I’m part of a free Discord group where we help each other navigate the market and overcome trading challenges. It’s a friendly, supportive community, with members from around the globe.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
discord.gg/a7sfTVkgxc
I’m part of a free Discord group where we help each other navigate the market and overcome trading challenges. It’s a friendly, supportive community, with members from around the globe.
I’m part of a free Discord group where we help each other navigate the market and overcome trading challenges. It’s a friendly, supportive community, with members from around the globe.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.