- USD/JPY retreats from intraday high, reverses the previous day’s bounce off one-month low.
- 50-SMA pierces off 100-SMA from above to portray bearish signal.
- Downbeat RSI, failure to cross three-week-old horizontal resistance keep sellers hopeful.
- Multiple tops marked since early February, two-month-long ascending support line challenge Yen pair bears.
USD/JPY takes offers to renew intraday low around 134.00 during early Wednesday as the Yen pair sellers reverse the previous day’s corrective bounce off a one-month low. In doing so, the quote justifies the bearish signals from the moving average crossover, as well as the downbeat Relative Strength Index (RSI) line, placed at 14.
That said, the 50-SMA prods the 100-SMA from above and joins the downbeat RSI line to suggest the USD/JPY pair’s further declines.
However, a five-week-old horizontal support area near 135.90-85 appears a tough nut to crack for the Yen pair bears.
In a case where the USD/JPY slips beneath the 135.85 support, the odds of witnessing an extended south-run towards a two-month-old ascending support line, close to 130.55 by the press time, can’t be ruled out.
Meanwhile, an area comprising multiple tops marked since February 17, near 135.05-15, restricts immediate USD/JPY upside.
Even if the quote traces the bullish MACD signals and crosses the 135.15 resistance, a convergence of the 50-SMA and the 100-SMA, around 135.65-70 by the press time, will be crucial to watch as it holds the key for the USD/JPY run-up towards the monthly high of 137.91.
USD/JPY: Four-hour chart
Trend: Further downside expected
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