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Bears attack 10-day SMA inside six-week-old ascending triangle

  • USD/JPY remains on the defensive near the daily low and gave back part of the previous day’s bounce from triangle support.
  • The pullback on the upside of the MACD and the bearish chart pattern keeps sellers hopeful.
  • 50-Day SMA adds to supports, double top around 116.35 becomes key resistance.

USD/JPY portrays the risk-off sentiment in the market, moving lower on the strength of the safe-haven Japanese yen and holding pressure around the intraday low near 115.30 at the start of the European session on Tuesday.

In doing so, the pair attacks the 10-day SMA at 115.30 within a bearish ascending triangle pattern established since Jan 4th.

It also keeps bears in the pair hopeful for a MACD pullback and the pair’s failure to sustain the previous day’s bounce from triangle support.

That said, sellers of the pair are currently targeting the triangle support line at 115.10, a break of which will confirm the bearish chart pattern and take USD/JPY sellers towards the late January low of 113.46. However, the 115.00 level can act as a validation point.

It is worth noting that drops below 113.45 will make the pair vulnerable to targeting a June 2021 peak around 111.65.

On the other hand, recovery moves may initially target the 116.00 round level, but it looks like the pair will remain elusive to break above the double top near 116.35.

Above that level, a move towards the psychological magnet at 120.00 can be expected. During the rally, the December 2016 peak at 118.66 may act as intermediate resistance.

USD/JPY daily chart

USD/JPY additional levels

Source: Fx Street

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