• A breakdown of an H&S formation at 127.00 has weakened the greenback bulls.
  • The 50- and 200-EMAs have displayed a Death Cross formation, which adds to the downside filters.
  • RSI’s bearish range shift is compelling for more downside going forward.

The USD/JPY pair is attempting a pullback towards the round-level resistance of 127.00 after a vertical downside move to a low of 126.48 on Tuesday. The pair witnessed a steep fall on Tuesday after slipping below a two-day low of 127.09. An imbalance move from the previous auction area of 127.09-128.32 has dampened the demand for the greenback.

A breakdown of the Head and Shoulder chart pattern on an hourly scale is underpinning the Japanese yen against the greenback. The breakdown of an H&S pattern denotes a prolonged inventory distribution from institutional investors to retain participants. A decisive slippage below the round level support of 127.00 has marked the trigger of the H&S breakdown.

The death cross, represented by the 50- and 200-period Exponential Moving Averages (EMAs) at 130.00 is signaling a confirmed bearish bias in the counter.

Meanwhile, a range shift has been displayed by the Relative Strength Index (RSI) (14) from 40.00-60.00 to the bearish range of 20.00-40.00 which advocates more downside.

Investors should attempt shorts after a pullback towards the 50-EMA at 127.38 for a downside move to Tuesday’s Low at 126.48, followed by the round-level support at 125.00.

Alternatively, the greenback bulls could regain strength if the asset oversteps Thursday’s high at 128.95, which will drive the asset towards May 17 high at 129.78. A breach of the latter will expose the asset to recapture its multi-year high at 131.28.

USD/JPY hourly chart       

USD/JPY

Overview
Today last price 126.82
Today Daily Change -1.09
Today Daily Change % -0.85
Today daily open 127.91
 
Trends
Daily SMA20 129.26
Daily SMA50 125.89
Daily SMA100 120.54
Daily SMA200 116.54
 
Levels
Previous Daily High 128.07
Previous Daily Low 127.16
Previous Weekly High 129.78
Previous Weekly Low 127.02
Previous Monthly High 131.26
Previous Monthly Low 121.67
Daily Fibonacci 38.2% 127.72
Daily Fibonacci 61.8% 127.51
Daily Pivot Point S1 127.36
Daily Pivot Point S2 126.8
Daily Pivot Point S3 126.44
Daily Pivot Point R1 128.27
Daily Pivot Point R2 128.63
Daily Pivot Point R3 129.18

 

 
 

 

 

 

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