USD/JPY technical analysis: Falls back to 200-day MA, further losses likely
|- USD/JPY is struggling to capitalize on Monday's bullish candlestick pattern.
- A break below the 200-day MA, currently at 111.55, looks likely, as the pair has dived out of a rising trendline.
USD/JPY created an inverted bullish hammer at the 200-day moving average (MA) line on Monday. So far, however, the follow-through has been anything but bullish, which takes the shine off the hammer candle.
As of writing, the spot is trading at the 200-day MA line of 111.55, having faced rejection at 111.69 earlier today.
A failure to capitalize on the inverted bullish hammer and the violation of the ascending trendline, as seen in the 8-hour chart below, indicates scope for a deeper drop below the 200-day MA of 111.55.
8-hour chart
As can be seen, the pair has dived out of the rising trendline, validating the bullish-to-bearish trend change first signaled by the bearish divergence of the RSI confirmed on April 24. As a result, a deeper drop toward 11.00 could unfold over the next 24 hours or so.
Daily chart
The above chart shows the pair is currently probing the 200-day MA of 111.55, having created a bullish inverted hammer on Monday. A close above 111.90 (high of the hammer candle) is needed to revive the bullish view.
Trend: Bearish
Pivot points
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.