USD/JPY Price Analysis: Weekly triangle advocates volatility expansion, 128.50 is the key
|- USD/JPY holds lower ground as bears keep the reins for the third consecutive day.
- One-week-old symmetrical triangle restricts immediate moves.
- Downbeat RSI, bearish MACD signals favor sellers to refresh multi-month low.
- Buyers need validation from six-week-old descending trend line to retake control.
USD/JPY licks its wounds around 129.40 as it seesaws near an intraday low during early Thursday. In doing so, the Yen pair consolidates the latest losses as a two-day losing streak.
Even so, the quote prints mild losses while staying inside a one-week-old symmetrical triangle, between 128.50 and 131.00 by the press time.
That said, the bearish MACD signals join the downward-sloping RSI (14) line to keep USD/JPY sellers hopeful. Also challenging the Yen pair buyers could be a descending resistance line from mid-December 2022, close to 131.80.
It should be noted that the 50% Fibonacci retracement level of the pair’s December 15 to January 16 downtrend, near 132.70, precedes the one-month-long horizontal resistance area around 134.50-75 to challenge the pair’s further upside.
On the flip side, a clear break of the stated triangle’s support, close to 128.50, becomes necessary for the USD/JPY seller’s conviction.
Following that, the monthly low surrounding 127.20, also the lowest level in eight months, could probe the Yen pair bears before directing them to the 61.8% Fibonacci Expansion (FE) of the quote’s moves between December 20 and January 18, around 125.20.
Overall, USD/JPY is funneling down towards a breakout point and hints at volatility expansion moving forward.
USD/JPY: Four-hour chart
Trend: Further downside expected
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.