Technical Analysis – USDJPY under increased downside pressure after drop below 50-day MA
December 14, 2017 8:25 am
USDJPY has come under increased downside pressure after sharply reversing a recent rally from the 111 to 113 handle.
Near-term momentum has stalled as can be seen by the RSI which did not fall to far below the 50 line. USDJPY has consequently stabilized near the mid-112 handle. But additional weakness cannot be ruled out since the pair dropped below the 50-day moving average.
The odds for a further decline are not that high for now as long as momentum has stalled but unless USDJPY can reclaim the 113 handle soon then there is scope for prices to move lower and target the area between the 200-day MA (111.66) and the key 111 level.
The level at 111 is a major one and is expected to offer strong support but if it fails to hold then a deeper move down would set USDJPY on the path toward the 108-area at the lower end of the longer-term range that the market has been trading in during the past nine months.
Overall, risk is tilted to the downside in the near term. Only a break above key resistance at 113 would ease immediate downside pressure and shift the focus back to 114.
USDJPY has come under increased downside pressure after sharply reversing a recent rally from the 111 to 113 handle.
Near-term momentum has stalled as can be seen by the RSI which did not fall to far below the 50 line. USDJPY has consequently stabilized near the mid-112 handle. But additional weakness cannot be ruled out since the pair dropped below the 50-day moving average.
The odds for a further decline are not that high for now as long as momentum has stalled but unless USDJPY can reclaim the 113 handle soon then there is scope for prices to move lower and target the area between the 200-day MA (111.66) and the key 111 level.
The level at 111 is a major one and is expected to offer strong support but if it fails to hold then a deeper move down would set USDJPY on the path toward the 108-area at the lower end of the longer-term range that the market has been trading in during the past nine months.
Overall, risk is tilted to the downside in the near term. Only a break above key resistance at 113 would ease immediate downside pressure and shift the focus back to 114.
Related Posts: