- USD/JPY portrays corrective bounce after refreshing two-month low.
- Oversold RSI conditions trigger rebound ahead of 100-DMA, 200-DMA convergence.
- Bearish MACD signals, clear break of previously important support line keep Yen pair sellers hopeful.
- Six-month-old rising support line will act as the last defense of bears past 137.00.
USD/JPY rebounds from the lowest levels in two months while paring intraday loss near 137.70 heading into Friday’s European session. In doing so, the Yen pair justifies oversold RSI conditions despite being in the red for the seventh consecutive day.
Apart from the oversold RSI (14) line, a convergence of the 100-DMA and 200-DMA, around 137.00 by the press time, also challenges the USD/JPY bears in keeping the reins.
However, Wednesday’s downside break of the previously key support line stretched from April, now immediate resistance near 139.50, joins the bearish MACD signals to keep the USD/JPY sellers hopeful.
Hence, the quote’s corrective bounce remains elusive below 139.50, a break of which will recall the 140.00 round figure to the chart.
However, the 61.8% Fibonacci retracement of its October 2022 to January 2023 downturn and a 10-month-old horizontal resistance area, respectively near 142.50 and 144.85-145.00, appear tough nuts to crack for the USD/JPY bulls past 140.00.
On the flip side, a daily closing beneath the aforementioned DMA confluence surrounding 137.00 will make the Yen pair vulnerable to testing an upward-sloping support line from mid-January 2023, close to 135.40 by the press time.
In a case where the USD/JPY remains bearish past 135.40, the odds of witnessing a gradual south-run toward the 130.00 psychological magnet can’t be ruled out.
USD/JPY: Daily chart
Trend: Limited downside expected
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