USD/JPY Price Analysis: Struggles at 157.00 as bearish engulfing chart pattern looms

USD/JPY retreats as it forms a bearish engulfing candle chart pattern.
Technical outlook: USD/JPY drops below Ichimoku Cloud top at 155.95, hinting at potential further declines.
Key support levels: Tenkan-Sen at 154.92, 50-DMA at 154.74, and trendline at 154.20; resistance at Kumo top 156.15/20 and May 29 high of 157.71.

Christian Borjon Valencia FXStreet

The USD/JPY retreated more than 0.70% on Monday following softer-than-expected business activity data in the United States (US). That, along with last Friday’s inflation report, the Fed’s Core PCE, reignited speculation that the US central bank could slash rates toward the end of the year. The pair trades at 156.14.

USD/JPY Price Analysis: Technical outlook

From a daily chart perspective, the USD/JPY failed to pierce the 157.50 resistance level and dived below the 157.00 figure, exacerbating a drop below the top of the Ichimoku Cloud (Kumo) at around 155.95, opening the door for further losses.

Even though momentum favors buyers, as depicted by the Relative Strength Index (RSI), it has turned flat close to the 50 midlines, about to enter bearish territory.

In the short term, the USD/JPY is neutral to downward biased. The first support would be the Tenkan-Sen at 154.92, followed by the 50-day moving average (DMA) at 154.74. Once cleared, the next stop would be an upslope support trendline at 154.20 before testing the bottom of the Kumo at 153.30/40.

Conversely, if USD/JPY climbs above the top of the Kumo at around 156.15/20, that would sponsor an uptick toward the May 29 high at 157.71.

USD/JPY Price Action – Daily Chart

USD/JPY

Overview
Today last price	156.12
Today Daily Change	-1.19
Today Daily Change %	-0.76
Today daily open	157.31

Trends
Daily SMA20	156.15
Daily SMA50	154.57
Daily SMA100	151.79
Daily SMA200	149.58

Levels
Previous Daily High	157.37
Previous Daily Low	156.56
Previous Weekly High	157.71
Previous Weekly Low	156.37
Previous Monthly High	157.99
Previous Monthly Low	151.86
Daily Fibonacci 38.2%	157.06
Daily Fibonacci 61.8%	156.87
Daily Pivot Point S1	156.79
Daily Pivot Point S2	156.27
Daily Pivot Point S3	155.98
Daily Pivot Point R1	157.6
Daily Pivot Point R2	157.89
Daily Pivot Point R3	158.41

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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