USD/JPY tumbled on Monday, falling below the 110.70 territory. However, the rate hit support at 110.10 and then it recovered somewhat. The pair continues to print lower peaks and lower troughs below the short-term downtrend line drawn from the peak of the 1st of August, and it is also trading below the prior medium-term upside support line taken from the low of the 29th of May. What’s more, the dip below 110.70 may have signaled the completion of a failure swing top formation on the daily chart, which combined with the aforementioned technical signs, suggests that the near-term outlook of the pair is to the downside.

If sellers are strong enough to jump back in from current levels, we would expect them to aim for another test near 110.10. That said, we would like to see a clear and decisive break below the psychological figure of 110.00 before we get confident on larger declines. Such a dip could initially pave the way for our next support of 109.70, marked by the low of the 27th of June. Another break below 109.70 could pave the way for the 109.40 territory.

Taking a look at our short-term oscillators, we see that the RSI rebounded from near its 30 line and it is now pointing up. The MACD lies below both its zero and trigger lines but shows signs that it could start bottoming. These indicators suggest that further recovery may be in the works before the bears decide to take the reins again, perhaps for a test near the 110.70 zone, or near the short-term downtrend line.

We prefer to wait for a clear break above that line before we abandon the bearish case and take the sidelines, at least in the short run. Such a move could open the path towards the 111.15 resistance, the break of which could set the stage for extensions towards the crossroads of the 111.50 barrier and the aforementioned medium-term upside line taken from the low of the 29th of May. In order to start examining whether the outlook has turned positive again, we would like to see a clear close above that crossroads.

Chart

 


Boost your performance with JFD Brokers’ proven DMA/STP. Don’t change your style, change your broker!

 


 

The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. JFD Group, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD Group analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD Group prohibits the duplication or publication without explicit approval.

72,99% of the retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure: https://www.jfdbank.com/en/legal/risk-disclosure

Recommended Content


Recommended Content

Editors’ Picks

USD/JPY trades below two-week top set on Thursday; looks to BoJ for fresh impetus

USD/JPY trades below two-week top set on Thursday; looks to BoJ for fresh impetus

USD/JPY trades with a positive bias below the 143.00 mark as traders await the BoJ policy update before placing fresh directional bets. In the meantime, data published this Friday showed that Japan's Core CPI rose to a 10-month high in August and reaffirmed bets that the BoJ will hike interest rates again in 2024. 

USD/JPY News
AUD/USD strengthens above 0.6800 on RBA-Fed policy divergence, eyes on PBoC rate decision

AUD/USD strengthens above 0.6800 on RBA-Fed policy divergence, eyes on PBoC rate decision

The AUD/USD pair trades on a stronger note near 0.6810 during the early Asian session on Friday. The uptick of the pair is bolstered by the softer US Dollar amid the prospects of further rate cuts by the US Federal Reserve this year. Later on Friday, the Fed’s Patrick Harker is set to speak.

AUD/USD News
Gold price holds steady near record peak amid bets for more Fed rate cuts

Gold price holds steady near record peak amid bets for more Fed rate cuts

Gold price hovers near the all-time peak touched earlier this week amid a bearish USD and rising bets for more upcoming rate cuts by the Fed. Moreover, concerns about an economic downturn in the US and China further underpin the safe-haven XAU/USD.

Gold News
Bank of Japan set to keep rates on hold after July’s hike shocked markets

Bank of Japan set to keep rates on hold after July’s hike shocked markets

The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session. 

Read more
XRP eyes gains as Ripple gears up for stablecoin launch, Grayscale XRP Trust notes rising NAV

XRP eyes gains as Ripple gears up for stablecoin launch, Grayscale XRP Trust notes rising NAV

Ripple (XRP) gained 2.3% since the start of the week. The altcoin’s gains are likely powered by key market movers that include Ripple USD (RUSD) stablecoin, Grayscale XRP Trust performance and the demand for the altcoin among institutional investors.

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Majors

Cryptocurrencies

Signatures