Technical Analysis – USDJPY enters bearish phase after break below 200-day moving average

XM Research Department XM

USDJPY has been bearish since October 16 and has now reversed half of the rally that took place from 107.31 to 114.73. The market is testing one-month lows at the 50% Fibonacci (111.04) of the September 8 to November 6 upleg.

A move above 112.00 would help ease downside pressure but a rise above 113.00 (23.6% Fibonacci) would invalidate the current bearish bias.

The market is expected to be supported at current levels as it trades in a critical zone between the key 111.0 level and the 50% Fibonacci. But a further deeper decline cannot be ruled out since RSI has dropped below 50. An extension lower would target the 61.8% Fibonacci at 110.14. From this point, the market would head towards the lower end of the longer-term range (108.00) that has been forming since January.

The break below the 50 and 200-day moving averages add to the bearish view in the short term. In the bigger picture, the market remains neutral.

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XM Research Department

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