USD/JPY technical analysis: 21-day SMA challenges upside bias despite trend-line break

Break of short-term descending trend-line favors advances if buyers clear 21-day SMA.
Immediate upward sloping support-line can limit the declines.

Anil Panchal FXStreet

Despite breaking four-week-old trend-line resistance, the USD/JPY pair couldn’t cross 21-day simple moving average (SMA) as it slips beneath 110.50 ahead of the European session on Wednesday.

With this, prices are likely to revisit 110.30 and 50% Fibonacci retracement of January 10 to April 24 upside, at 110.10. However, an ascending trend-line stretched since May 13 may limit the pair’s further declines at 109.80/75.

In a case where sellers dominate market sentiment, 61.8% Fibonacci retracement around 109.55 and current month lows near 109.00 could become their favorites.

Alternatively, a successful break of 110.65 comprising 21-day SMA could further escalate the pair’s rise towards 50-day SMA level of 111.00.

Also, pair’s extended north-run past-111.00 can avail 111.70 and 112.20 as intermediate halts ahead of highlighting April highs adjacent to 112.40.

USD/JPY daily chart

Trend: Pullback expected

1. R3 111.44
2. R2 111.06
3. R1 110.78
PP 110.4
1. S1 110.11
2. S2 109.73
3. S3 109.45

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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