USD/JPY technical analysis: Holding 2.5-month rising trendline
|- USD/JPY remains on slippery grounds despite Friday's defense of key trendline.
- A break below the ascending trendline support would expose the 200-day MA at 109.02.
USD/JPY found bids below the support of the trendline connecting Aug. 26 and Oct. 3 lows on Friday.
So far, however, Friday's defense of the trendline has failed to draw bids. This is evident from USD/JPY's flat action around 108.22. Currently, the rising trendline support is located at 108.09.
Note that the 14-day relative strength index has dipped below 50, indicating bearish conditions. Further, the bearish view put forward by bearish reversal signaled by Wednesday's candle with long upper wick and Thursday's sharp drop is still valid.
As a result, a breakdown of the ascending trendline cannot be ruled out. That will likely yield a deeper drop to the 200-day MA at 109.02.
A break above the former support-turned-resistance of 108.25 is needed to invalidate the bearish setup.
Daily chart
Trend: Bearish
Technical levels
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