USDJPY outlook: Completion of reversal pattern risks deeper pullback

Slobodan Drvenica Windsor Brokers

USDJPY

The pair holds firmly in red in early European trading on Friday and probes below psychological 110 support.
The dollar bulls are losing traction after spike to 110.85 was all seen from hawkish Fed on Wednesday, as the greenback fell sharply after hitting three-week high at 110.85.
Strong upside rejection on Wednesday, marked by daily candle with long upper shadow, formed bull-trap pattern, with further easing on Thursday completing reversal pattern on daily chart.
Loss of key 200SMA support and extension through a cluster of supports between 110.02 and 109.82 (provided by 5; 10; 20; 30SMA’s) 30SMA support being reinforced by Fibo 38.2% of 108.11/110.85 rally, would generate next strong bearish signal and risk deeper pullback.
South-heading 14-d momentum and RSI support scenario.

Res: 110.17; 110.36; 110.49; 110.85
Sup: 109.82; 109.47; 109.15; 109.04

Interested in USDJPY technicals? Check out the key levels

1. R3 111.31
2. R2 111.08
3. R1 110.71
PP 110.49
1. S1 110.12
2. S2 109.89
3. S3 109.52

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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