USD/JPY Price Analysis: Offers on double top formation but bulls are still hopeful
- USD/JPY has tumbled after a double top formation at 118.40.
- Bulls eye a range shift in the RSI (14) at 60.00-80.00 for further upside.
- The trendline placed from 114.65 is limiting the downside risk.
The USD/JPY pair has found some significant offers after hitting an intraday high of 118.40 on Wednesday. The major has witnessed a negative open-rejection reverse price action on Wednesday. The pair opened at 118.31, surged to 118.40 but found intensified selling pressure and slipped below the opening price.
On an hourly scale, USD/JPY has formed a double top as the asset found barricades on the re-test of its previous highs at 118.40. Investors dumped the asset after sensing it was an expensive bet. The trendline placed from March 4 lows at 114.65 adjoining the March 9 low and March 10 low at 115.55 and 115.85 will continue to act as major support going forward.
The Relative Strength Index (RSI) (14) has shifted its range from 60.00-80.00 to 40.00-60.00, which signals no more upside until it oversteps 60.00 again.
For an upside, bulls need to surpass the double top formation at 118.40, which will send the major to a five-year high at 118.66, followed by the 27 January 2016 high at 119.07.
On the flip side, bulls can lose control if the major violates the 30-period Exponential Moving Average (EMA) at 118.17 on the downside. Violation of 30-period EMA will drag the pair to 50-period EMA and 100-period EMA at 117.97 and 117.47 respectively.
USD/JPY hourly chart
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Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
