- USD/JPY takes offers to extend the previous day’s retreat from two-week high.
- Two-month-old horizontal support zone, key EMA confluence challenge bears.
- RSI’s retreat from overbought area, looming bear cross on MACD prod Yen pair buyers.
- Risk-on mood weighs on US Dollar ahead of Fed, BoJ announcements
USD/JPY remains on the back foot for the second consecutive day, down 0.15% intraday near 141.25 by the press time, as the risk-on mood in Asia weighs on the US Dollar of late. Even so, the key technical supports and cautious mood ahead of this week’s monetary policy meetings of the US Federal Reserve and the Bank of Japan (BoJ) prod the Yen pair sellers.
That said, the RSI (14) line’s retreat from the overbought territory joins the impending bear cross on the MACD indicator to also weigh on the USD/JPY price.
However, a two-month-old horizontal support area surrounding the 141.00 round figure restricts the immediate downside of the Yen pair.
Even if the quote drops back below the 141.00 support, a convergence of the 100 and 200 Exponential Moving Average (EMA), around 140.80 at the latest, appears a tough nut to crack for the USD/JPY bears to conquer.
It’s worth mentioning that a fortnight-long rising support line near 140.55 acts as the last defense of the USD/JPY bulls.
On the flip side, the latest peak of 141.95 and the 61.8% Fibonacci retracement of the pair’s June 30 to July 14 downside, near 142.05, can challenge the USD/JPY pair’s recovery moves.
Following that, the July 10 swing high of around 143.00 can test the Yen pair buyers before directing them to the monthly top of near 145.00.
USD/JPY: Four-hour chart
Trend: Limited downside expected
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