USD/JPY outlook: Bears hold grip and eye key support

Slobodan Drvenica Windsor Brokers

USD/JPY

USDJPY continues to descend for the fifth consecutive day, after a double upside rejection and a bull-trap at 148.49 Fibo barrier (76.4% of 151.15/139.88) contributed to the change of direction.

Weaker dollar (which acted as a safe haven on trade uncertainty) following relief on US-China trade agreement and signal that BoJ may resume with tightening (which boosts demand for yen) were the main drivers.

Bears eye pivotal support at 144.26 (50% retracement of 139.88/148.64 recovery leg, reinforced by daily Kijun-sen and bull-trendline off 139.88), loss of which would further weaken near-term structure and risk deeper drop.

The action remains weighed by falling thick daily cloud, daily MA’s in predominantly bearish configuration and long upper shadow weekly candle of last week which points to growing offers and potential formation of reversal pattern on weekly chart.

However, bears are likely to face increased headwinds at 144.26 support that may keep the price in consolidation before attempts through 144.26 trigger.

Near-term action is expected to remain biased lower while below daily Tenkan-sen (145.51).

Res: 145.30; 145.51; 146.10; 146.58.
Sup: 144.26; 143.84; 143.23; 142.38.

Interested in USD/JPY technicals? Check out the key levels

1. R3 147.39
2. R2 146.75
3. R1 146.22
PP 145.57
1. S1 145.04
2. S2 144.39
3. S3 143.86

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

EUR/USD edges above 1.1600 near six-week lows

EUR/USD holds ground after three days of losses, trading around 1.1610 during the Asian hours on Friday. The 14-day Relative Strength Index momentum indicator, currently at 35 (neutral-bearish), shows momentum skewed to the downside.

GBP/USD remains below 1.3400 as US Dollar gains on Fed caution bets

GBP/USD edges higher after registering modest losses in the previous session, trading around 1.3380 during the Asian hours on Friday. The pair may further lose ground as the US Dollar receives support after Thursday’s US Initial Jobless Claims data, which reinforced expectations that the Federal Reserve will keep interest rates on hold for the coming months.

Gold’s rally hits pause near $4,640 as Trump calms Iran fears

Gold price tumbles to near $4,605 during the early Asian session on Friday. The precious metal edges lower as the US Initial Jobless Claims data boost the ‌US Dollar. The US December Industrial Production report will be published later on Friday. Also, Federal Reserve Governor Michelle Bowman is scheduled to speak.