USD/JPY outlook: Fresh weakness breaks below the floor of four-week range

Slobodan Drvenica Windsor Brokers

USD/JPY

USD/JPY fell sharply during late Asian/early European trading on Thursday (down 0.8%) and attempts to break below multi-day range, after the action was repeatedly capped by daily cloud top / 200DMA.

Fresh drop weakens the structure on daily chart, as the price moves deeper into thick daily cloud and breaks below daily Kijun-sen (157.16), pressuring next significant support at 156.68 (Fibo 38.2% of 152.88/159.03 upleg).

Falling 14-d momentum broke into negative territory, contributing to negative near-term outlook, with daily close below 157.50 (range floor) seen as minimum requirement to keep fresh bears in play.

In addition, break and close below 156.68 Fibo support would confirm negative signal and open way for deeper drop, which may challenge daily cloud base (155.65).

Alternatively, return and close within existing range would signal false break lower and keep the price in prolonged sideways mode.

Only sustained break above 200DMA / cloud top would be a game changer.

Res: 157.16; 157.58; 157.88; 158.53.
Sup: 156.68; 156.37; 155.96; 155.65.

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.

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