HomeContributorsTechnical AnalysisUSDJPY Maintains Downtrend In Near-Term, Neutral In Medium-Term

USDJPY Maintains Downtrend In Near-Term, Neutral In Medium-Term

USDJPY is under pressure in the short-term and maintains the downtrend from the 5-month peak of 114.49, while the pair trades in a broader range between 108.00 to 114.00 in the medium term. USDJPY is now trading at the bottom of this consolidation range.

The near-term risk is to the downside after the market failed to break above the strong 110.96 resistance at the 61.8% Fibonacci retracement level of the rise from 108.80 to 114.49 (June 14 to July 11 upleg).

As long as this resistance at 110.96 holds, the bias will likely remain bearish in the short-term with scope to re-test the August 11 low of 108.80. A deeper decline could see a further slide to the April 17 low of 108.12 ahead of the next major low of 101.18.

Alternatively, a break of the resistance at 110.96 would ease downside pressure and USDJPY could resume upside towards the 50-day moving average (MA) at 111.43 and the 50% Fibonacci at 111.62. A move higher from this point would dampen the bearish view and turn the focus to the top of the range (114.49 resistance) and the key 115.00 level.

Looking at the technical indicators, the signals are bearish. There was a bearish crossover of the 50-day MA with the 200-day MA on July 18. Momentum indicators are in bearish territory, as RSI is below 50 and MACD is below zero.

Overall the near-term bias is bearish while the medium-term picture remains neutral.

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