USD/JPY Price Analysis: Intraday recovery falters near 200-hour SMA, around 135.70 area
|- USD/JPY witnessed selling for the second successive day and dropped closer to the weekly low.
- The overnight break through an ascending trend-line and 200-hour SMA favours bearish traders.
- Mixed technical indicators warrant some caution before confirming a near-term top for the pair.
The USD/JPY pair extended its retracement slide from the 137.00 mark, or a fresh 24-year high touched on Wednesday and witnessed heavy selling for the second successive day on Friday. The corrective slide dragged spot prices back closer to the weekly low, though bulls showed some resilience below the 135.00 psychological mark.
Given the overnight breakdown through a two-week-old ascending trend-line, subsequent weakness below the 200-hour SMA was seen as a fresh trigger for bearish traders. The latter, currently around the 135.70 region, capped the USD/JPY pair's intraday recovery move and should now act as a key pivotal point for short-term traders.
Technical indicators, meanwhile, are holding deep in the bearish territory on hourly charts, though are still far from confirming a negative bias on the daily chart. This makes it prudent to wait for strong follow-through selling before confirming that the USD/JPY pair has topped out and positioning for any further depreciating move.
From current levels, any further decline below the 135.00 mark is likely to find decent support near the mid-134.00s, which if broken would trigger a fresh wave of technical selling. The USD/JPY pair might then weaken further below the 134.00 round figure and accelerate the fall towards testing the next relevant hurdle near the 133.60 area.
On the flip side, momentum beyond the 135.70 area (200-hour SMA) now seems to confront some resistance near the 136.00 round-figure mark. Any further recovery is more likely to attract fresh sellers and remain capped near the aforementioned ascending trend-line support breakpoint, now turned resistance, near the 136.35-136.40 region.
USD/JPY 1-hour chart
Key levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.