USD/JPY Price Analysis: Gearing up for another break of 131.00 on impending bear cross

USD/JPY is returning to the red zone below the 132.00 level early Thursday, fading a dead cat bounce seen on Wednesday. The renewed weakness in the US Dollar alongside the Treasury bond yields is weighing down on the currency pair.

The US Dollar is on a slippery slope, courtesy of the ‘Santa rally’ that kicked off on Wall Street, which is extending into the Asian markets. Meanwhile, the Yen resume its upward momentum, as the Japanese bond yields shifted into a new higher range.

The Bank of Japan (BoJ) announced an unscheduled bond-buying operation for the second straight day, which has failed to have any material impact on the USD/JPY pair so far.

Markets look past the upbeat US CB Consumer Confidence data, as all eyes now remain on the final revision to the US Q3 GDP, weekly Jobless Claims, Japanese inflation and BoJ minutes due on the cards in the balance of this week.

From a short-term technical perspective, USD/JPY is consolidating the downside, awaiting a fresh catalyst for a fresh leg lower.

The bearish 21-Daily Moving Average (DMA) is on the verge of cutting the mildly bullish 200DMA from above. A bull cross confirmation is what is needed for bears to accelerate control.

The 14-day Relative Strength Index (RSI) is sitting just above the oversold territory, suggesting that there is more room for a decline.

Immediate support awaits at the 131.00 round figure. Sellers will then target the four-month low of 130.57.

USD/JPY: Daily chart

On the flip side, any recovery attempts will need to find acceptance above the 132.00 hurdle on a sustained basis. Recapturing Wednesday’s high at 132.53 is critical to unleashing the additional recovery toward the 133.00 barrier.

USD/JPY: Additional technical levels