USD/JPY Price Analysis: Bulls climbing a wall of resistance

USD/JPY is finding resistance in the 105.80s and focus is on the downside from monthly supply.
On a break higher, bearish liquidity would be expected to firm.

Ross J Burland FXStreet

USD/JPY has enjoyed a spell on the bid in a significant retracement of the monthly bearish trend.

However,the following is a top-down analysis that illustrates the mountain that the bulls still have to climb.

Monthly chart

The monthly supply is compelling.

The eclipsed bullish candle in all of the prior bearish impulses would be expected to offer the strongest supply and liquidity within a 50% mean reversion and 38.2% Fibonacci retracement area of confluence between 105.40 and 106.20, with 105.80 as the mean.

Weekly chart

While the price is below resistance, the bias remains to the downside at this juncture from a weekly perspective.

Daily chart

With the price testing resistance, there is the prospect of a higher high. In such an event, however, there would be expected to sellers from a positioning basis to meet the demand in the spot market.

Monthly supply territory would be expected to hold and result in a rejection of the next bullish impulse.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD flirts with weekly lows near 1.1770

EUR/USD now comes under further selling pressure, breaking below the 1.1800 support to challenge the area of weekly throughs near 1.1770 on Thursday. The pair’s decline comes in response to marked gains in the US Dollar amid steady geopolitical tensions. Ealier in the day, the ECB’s Lagarde delivered cautious remarks, although the currency remained apathetic.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.