- USD/JPY falters to extend its downtrend after forming a bearish engulfing candle pattern.
- The RSI and the RoC suggest that the USD/JPY might resume downwards, though it needs the USD/JPY to fall below 131.30.
The USD/JPY is almost flat as Monday’s New York session wanes, printing a doji preceded by a bearish engulfing candle pattern that failed to trigger downward action. The USD/JPY dived as low as 131.30, still almost unchanged, down by 0.17%. At the time of typing, the USD/JPY is trading at 131.88.
USD/JPY Price Analysis: Technical outlook
After testing the 200-day Exponential Moving Average (EMA) at around 134.70s on Friday, the USD/JPY remained almost unchanged as risk appetite improved and safe-haven peers weakened. Therefore, the USD/JPY seesawed between the high/low of 132.65-131.30 before stabilizing around 131.80s, without buyers/sellers having the upper hand. Should be said that the Relative Strength Index (RSI) portrays the pair as bearish biased, though the Rate of Change (RoC) shows momentum heading downwards.
Hence, the USD/JPY might resume its downtrend, but it would need to hurdle some support levels on its way down. The USD/JPY first support would be the January 9 daily low of 131.30. Break below will expose the 131.00 figure, followed by the January 4 swing low of 129.92 and the YTD low of 129.50.
USD/JPY Key Technical Levels
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