The USD/JPY has made a bearish run from 103 to 100.80, just above the 2014-low of 100.75. This swing puts the pair at the brink of opening up a bearish outlook.
Yesterday’s BoJ statement and FOMC meeting minutes are USD/JPY-bearish fundamental factors. However, the usd-jpy rallied to a new high on the week, around 101.70.
Here, the USD/JPY faces some resistance factors:
1) support/resistance pivot area.
2) 50-SMA in 4H chart.
3) 200-day SMA (in the daily chart below)
4) A falling trendline
5) Oscillators: Stochastic above 80, RSI around 60. In a bearish market, this combination of oscillator readings suggest the market is finished with a bullish cycle, and ready for a bearish one.
If USD/JPY fails to break above 101.75, and falls below 101.40, the focus is back to the 100.75-100.80 lows. It should be noted that a rising trendline from March 2013 and the 200-day SMA were broken last week. Traders are now testing the 200-day SMA as resistance. Holding south of 101.75 thus would really take away confidence from USD/JPY-bulls and transfer it to bears.
A break above 100.80 first faces the 102 handle. Above 102, the bearish outlook is less likely, but a break above 103 and a falling trendline might be needed to reintroduce the bullish mode, that USD/JPY has been in since 2012.
In this scenario, the 104.10, then the 105.40 (2014-high) would be in sight.
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Earlier: Gold (XAU/USD) Threatens Triangle Resistance, Again