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USD/JPY Price Analysis: Slumps from weekly highs as bearish-engulfing candle pattern looms

  • USD/JPY trades with losses, ending its five-day gain amid a falling US Dollar and risk-averse mood.
  • A daily close below 138.17 could drive the pair further down, with 138.00 as the primary support.
  • USD/JPY needs to retake the 138.00 level to regain upward momentum, with resistances at 138.17 and 139.00.

USD/JPY forms a bearish-engulfing candlestick pattern, snapping five days of gains, down almost 0.60%, after hitting a weekly high of 138.74. Risk-off and a weaker US Dollar (USD), weighed on the USD/JPY pair. At the time of writing, the USD/JPY is trading at 137.90, below its opening price.

USD/JPY Price Analysis: Technical outlook

The USD/JPY remains upward biased, but a bearish candlestick formation could open the door for further losses. The Relative Strength Index (RSI) indicator remains in bullish territory but aims lower, which could put a lid on the USD/JPY fall. However, if USD/JPY achieves a daily close below the December 15 daily low of 138.17, that would exert downward pressure on the pair.

In that outcome, the USD/JPY first support would be 138.00. A breach of the latter will expose the May 18 daily low of 137.28, followed by the May 17 swing low at 136.30.

The USD/JPY must claim the 138.00 figure for a bullish resumption. Once done, the next resistance would be the December 15 high of 138.17, followed by the 139.00 figure. A rally above the latter will expose the November 30 high at 139.89, before challenging the 140.00 figure.

USD/JPY Price Action – Daily chart

USD/JPY Daily chart

USD/JPY

Overview
Today last price137.89
Today Daily Change-0.82
Today Daily Change %-0.59
Today daily open138.71
 
Trends
Daily SMA20135.38
Daily SMA50133.8
Daily SMA100133.07
Daily SMA200137.1
 
Levels
Previous Daily High138.75
Previous Daily Low137.29
Previous Weekly High135.77
Previous Weekly Low133.74
Previous Monthly High136.56
Previous Monthly Low130.63
Daily Fibonacci 38.2%138.19
Daily Fibonacci 61.8%137.85
Daily Pivot Point S1137.75
Daily Pivot Point S2136.79
Daily Pivot Point S3136.29
Daily Pivot Point R1139.21
Daily Pivot Point R2139.71
Daily Pivot Point R3140.66

Author

Christian Borjon Valencia

Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.

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