FxWirePro: USD/JPY hits 5-month lows, bearish trend slides in sloping channel, more slumps on cards as both leading and lagging oscillators indicate weakness

The current price behaviour of this pair has been sliding through sloping channel formation (refer daily chart). Bears have managed to hit the fresh 5-months lows at 109.553.

Price behaviour in sloping channel, any attempts of upswings struggle to go above DMAs, more dips likely upon bearish DMA crossover.

Although the current prices are attempting to bounce back but restrained well below EMAs, don't expect sharp rises as momentum now seems to be shrinking and most likely EMA crossover.

USDJPY dropped vigorously from the highs of 118.665 levels to the current 112.865 levels, the flurry of bearish streaks occurred especially after long legged doji at 116.942 levels in uptrend that indicates weakness in this pair.

Ever since long legged doji occurred on monthly charts, the momentum in major trend is intensified to evidence more slumps, as a result, the current prices have gone below EMAs on weekly chart.

RSI signals gaining strength in selling sentiments as it converges to the mild sideways to downswings on both daily and a clear convergence to the slumps on weekly terms, while same has been the case on stochastic curves, the momentum in selling sentiments is biased to bears.

Most importantly, MACD has signalled the downtrend likely to extend on weekly terms.

Trading tips:

Well, as a result of above technical reasoning, on speculative grounds we advise tunnel spreads which are binary versions of debit put spreads.

This strategy is likely to fetch leveraged yields than spot FX and certain yields keeping upper strikes at 110.249 and lower strikes at 109.062 levels.