FxWirePro: USD/JPY reverses recent rally, bias back to downside
The USD/JPY pair sunk sharply towards lower levels on Friday, hitting as low as 115.15, level last seen 1 week ago as mixed US economic data attracted investors back in safe heaven Japanese yen. The Japanese yen attracte…
The USD/JPY pair sunk sharply towards lower levels on Friday, hitting as low as 115.15, level last seen 1 week ago as mixed US economic data attracted investors back in safe heaven Japanese yen.
The Japanese yen attracted buying interest as global equities slipped and worries over China economy continued to create anxiety among investors as S&P cut outlook for China's sovereign credit rating to negative from stable.
Further upside is expected to be limited as the pair finds strong resistance at 112.56 which should limit upside and bring a decline towards lower levels.
Technically the pair has extended its decline below its 20 SMA, the RSI in the 4 hour chart is indicating downwards at 35, meanwhile the 55, 30 and 20 MA’s are pointing strong bearish momentum towards lower side. Overall the technical indicators are depicting further downtrend for this pair.
To the upside, the strong resistance can be seen at 112.56 a break above this level would take the pair towards next resistance level at 113.00.
To the downside immediate support can be seen at 111.66, a break below this level will open the door towards next level at 111.37.
