USD/JPY Weekly Review:
- Last week ended with the greenback declining against its major peers.
- Price action is favoured by the bears but hopes for a bullish scenario remain.
USD/JPY Weekly Review: Continues a bearish retracement below 109.00
The month is slowly becoming neutral in the USD/JPY pair across the board. Last week ended with an ongoing breakout of the bullish channel drawn since the lows from August. However, over the last few days, there has been a broad-based USD sell-off. Favouring the decline of the greenback against its major peers in the Forex sphere.
Such weakness hasn’t been seen in quotes against the Latam currencies. Looking back in the 4H chart, the spot is finding dynamic support around the 200 SMA. Which also coincides with the lower band of the previously mentioned channel. The overall bullish structure is keeping its stance, favoured by the current price action in the US Dollar and a surge in the JPY demand.
Currently, USD/JPY is consolidating weekly losses below the 109 handle.
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Price action favoured by the bears in the short term
The bearish path is demonstrating an interesting scenario in the current price dynamics. At first glance, the pair is supported by the 108.27 level, and if it gives up in favour of the bears, all focus will shift towards 107.60.
If the pair then decides to go beyond such a hurdle, the lows from October could be tested in the meantime. To consolidate the downside, the quote should break below the 106.00 neighbourhood to allow a death cross of the 50 and 200 SMAs. Such a signal, of course, will strengthen the bears’ bias.
Bullish scenario: 110 on the table
In the case that USD/JPY finds strong support at the current stage, the nearest critical resistance lies at 109.22, where a breakout should happen. That said, the rally could extend its road towards the 110.00 round-figure and later the 110.64 region.
According to the technical oscillators, RSI is showing a negative stance, favouring the bearish scenario. Nonetheless, it recently went off from the oversold territory, calling for a rebound. Moreover, Momentum is losing bullish steam, as it’s pointing downwards.