- USD/JPY loses 0.73% after three bullish days on cooling US inflation.
- The pair falls below the key daily moving averages, signaling the possibility of further declines.
The pair USD/JPY It breaks three days of gains, dips below the 135.00 figure and breaks away from the 20 and 100 day EMAs at 134.53 and 134.24 respectively, after US inflation cooled. The fall in the 10-year US Treasury yield weighed on the USD/JPY pair due to its close correlation. At the time of writing these lines, the USD/JPY pair is trading at 134.22, down 0.73%.
USD/JPY Price Analysis: Technical Perspective
As USD/JPY fell below the crucial daily moving averages, the USD/JPY bias changed to neutral. On its way south, the USD/JPY pair dipped below dynamic support levels such as the 20 and 100 day EMAs, opening the door to test the psychological 134.00 price level.
If USD/JPY breaks below the latter, the USD/JPY pair would challenge the 50-day EMA at 133.97 before testing the 200-day EMA at 133.87. A break of this last level would expose the May 4 low at 133.49.
Conversely, if USD/JPY recaptures the 20-day EMA at 134.53, the next resistance would be the 135.00 figure, followed by the May 10 high at 135.47. Once broken, the next demand zone would be the May 2 high at 137.77.
Oscillators turned bearish as the Relative Strength Index (RSI) crossed below the mid-50 line, while the 3-day exchange rate registered negative readings.
Trend: Below 135.00, further declines expected.
USD/JPY daily chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
