USD/JPY Price Analysis: Hangs near multi-month low, below 200-day SMA ahead of NFP

USD/JPY plummets to a fresh multi-month low on Friday amid sustained USD selling bias.
A break and acceptance below the 200-day SMA support prospects for additional losses.
The bearish pressure, however, abates amid oversold conditions and ahead of the NFP.

Haresh Menghani FXStreet

The USD/JPY pair prolongs its bearish trend for the fifth straight day on Friday - also marking the ninth day of a negative move in the previous ten and dives to its lowest level since August 16. The pair now seems to have entered a bearish consolidation phase and is seen hovering around the 134.00 mark as traders await the US NonFarm Payrolls (NFP) report for a fresh impetus.

The relentless US Dollar selling remains unabated amid growing acceptance that the US Federal Reserve will slow the pace of its rate-hiking cycle. Apart from this, the recent sharp decline in the US Treasury bond yields narrows the US-Japan rate differential, which benefits the Japanese Yen. This, along with the overnight hawkish signals by the Bank of Japan board member Asahi Noguchi contributes to the heavily offered tone surrounding the USD/JPY pair.

From a technical perspective, this week's downfall confirmed a breakdown through an upward sloping trend-line extending from late March. A subsequent slide below the 137.65-137.50 horizontal support and the 135.00 psychological mark zone is seen as a fresh trigger for bearish traders. Moreover, acceptance below the very important 200-day Simple Moving Average (SMA) supports prospects for an extension of the recent depreciating move for the USD/JPY pair.

That said, oscillators on short-term charts are already flashing oversold conditions and warrant some caution. Nevertheless, the USD/JPY pair seems poised to weaken further towards testing sub-133.00 levels. The downward trajectory could eventually drag spot prices below the 132.00 round figure, towards the next relevant support near the 131.50 area en route to the 131.00 mark and the August swing low, around the 130.40-130.35 zone.

On the flip side, the 200-day SMA, currently around the 134.50 region, could act as an immediate strong resistance ahead of the 135.00 mark. A sustained move beyond might trigger a short-covering rally and allow the USD/JPY pair to reclaim the 136.00 round figure. Any subsequent move up, however, is more likely to attract fresh sellers and remain capped near the 136.70 support breakpoint, which should act now act as a pivotal point.

USD/JPY daily chart

Key levels to watch

USD/JPY

Overview
Today last price	134.06
Today Daily Change	-1.25
Today Daily Change %	-0.92
Today daily open	135.31

Trends
Daily SMA20	140.78
Daily SMA50	144.32
Daily SMA100	141.18
Daily SMA200	134.41

Levels
Previous Daily High	138.15
Previous Daily Low	135.21
Previous Weekly High	142.25
Previous Weekly Low	138.05
Previous Monthly High	148.82
Previous Monthly Low	137.5
Daily Fibonacci 38.2%	136.33
Daily Fibonacci 61.8%	137.03
Daily Pivot Point S1	134.3
Daily Pivot Point S2	133.29
Daily Pivot Point S3	131.36
Daily Pivot Point R1	137.24
Daily Pivot Point R2	139.16
Daily Pivot Point R3	140.17

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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