USDJPY has been in a prolonged uptrend for almost two years, crossing above its historical resistance levels to post a 32-year high of 151.94 in October. Even though the pair declined moderately from its recent multi-year peak, it has been attempting a rebound in the last few daily sessions.
The momentum indicators currently suggest that bearish forces are in control. Specifically, the RSI is hovering below its 50-neutral mark, while the stochastic oscillator is set to post a bearish cross near the overbought area.
If sellers push the price lower, initial support could be found at the recent low of 137.66. Should that floor collapse, the bears might aim for 135.57, which has acted both as resistance and support in the previous months. Failing to halt there, the August low of 130.40 could provide further downside protection.
To the upside, bullish actions could come to a halt at the recent resistance of 142.47. Breaking above that zone, the price could then ascend to challenge the 50-day simple moving average (SMA), currently at 145.10. An upside violation of the latter may set the stage for the 32-year high of 151.94.
In brief, it appears that USDJPY’s latest rebound is running out of steam. Therefore, a break below the 137.66 could validate the continuation of the pair’s short-term downtrend.
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