USD/JPY strengthening was short-lived
2023.02.08 07:38
USD/JPY strengthening was short-lived
After hitting a wall near the 50-day simple moving average (SMA) at 133.60, USD/JPY quickly fell to 131.00 on Tuesday to close the positive gap from Monday.
If the pair pivots within the 129.70-129.20 region, which is represented by the 20-day SMA and the surface of the shorter-term bearish channel, respectively, the bulls’ efforts to reverse the trend would be ruined by another leg down. If this is not the case, the sell-off may continue toward the previous low of 127.21, and lower, some consolidation may take place near 126.00 before the channel’s lower boundary, which can be seen in the 124.00-123.50 range, is clear.
However, a bearish bias has not yet been confirmed by the technical indicators. The MACD has barely been affected, gradually extending its recovery within the negative zone, whereas the RSI has managed to maintain its position above its 50 neutral mark in spite of the most recent price decline.
However, in the short term, upside movements will be threatened by the 50-day SMA and the 133.00 zone, where the 23.6% Fibonacci retracement of the 151.93-127.21 downleg is located. Before the price reaches the 200-day moving average and the 38.2% Fibonacci level of 136.65, buyers would also like to see a higher high above the 133.70-134.45 area.
In a nutshell, the conditional buying interest suggests that the USDJPY’s sideways movement may continue in the upcoming sessions. To maintain hopes for a bullish trend reversal, the pair must remain above its 20-day SMA; however, only a rally above 134.45 would confirm that.
