USDJPY is set for another battle around the 103.00 supportive area, which it failed to successfully breach two weeks ago, despite slipping to a new eight-month low of 102.86.
The latest bearish correction follows another rejection near the 20-day simple moving average (SMA), and questions are arising about whether the pair can further strengthen its March downward pattern within the descending channel.
The technical picture continues to reflect a neutral-to-bearish bias as the market action keeps developing below the downward-sloping 20- and 50-day SMAs, though not significantly. In other discouraging signals, the red Tenkan-sen line is also decelerating below the blue Kijun-sen, while the RSI has resumed its negative momentum below its 50 neutral mark.
A successful close below the 103.00 number could trigger a new bearish wave towards the key 102.26 support region. If selling pressure persists below that point, the door would open for the 101.17 trough, while slightly lower, all eyes will turn to the bottom of the channel.
Alternatively, a break above the 20-day SMA currently at 103.80 may help the pair to reach the 50-day SMA and the upper surface of the channel around 104.30. Running above the cloud and breaching the 104.70 resistance zone too, the pair could next challenge the November peak of 105.66 and then the 200-day SMA at 106.00.
In brief, USDJPY is looking neutral-to-bearish in the short-term picture. A decisive close below 103.00 may confirm another negative extension to 102.26, while a rise above the 20-day SMA could bring the upper surface of the channel under the spotlight.
Origin: XM
