USD/JPY outlook: Japanese yen rises to a multi-week high vs Dollar on growing safe-haven demand

Slobodan Drvenica Windsor Brokers

USD/JPY

The USDJPY stays firmly in red and extends losses in early Monday, after falling 1.3% on Friday.
Rising risk aversion after UBS’ takeover of troubled Credit Suisse bank failed to calm tensions in the market, offered fresh support to safe-haven Japanese yen.

Fresh weakness broke below pivotal Fibo support at 131.30 (61.8% retracement of 127.22/137.90) and cracked the base of daily Ichimoku cloud (130.74), focusing on psychological 130.00 support and 129.74 (Fibo 76.4%).

Daily technical studies point to strong rise in negative momentum and moving averages in full bearish setup, warning of deeper fall.

Also, last Friday’s drop and close below pivotal Fibo support at 132.56 (50% retracement of 127.22/137.90, reinforced by 55DMA) neutralized positive signal of bull-trap, after last week’s action dented this support but repeatedly failed to register a close below.

Today’s close below 131.30 Fibo support is seen as a minimum requirement to keep bears intact, while sustained break below daily cloud would further weaken near-term structure and increase downside pressure.

Former pivotal support at 132.56 (broken Fibo 50%, reinforced by daily cloud top at 132.69) reverted to strong resistance, which marks the upper breakpoint.

Res: 131.55; 132.28; 132.69; 132.99.
Sup: 130.53; 130.00; 129.74; 128.32.

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

1. R3 135.43
2. R2 134.6
3. R1 133.22
PP 132.39
1. S1 131.01
2. S2 130.18
3. S3 128.8

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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