Conclusion for today’s USD JPY technical analysis:
Lack of a price close above ~109.827 implies an increase in bearish strength.
USDJPY analysis for today takes a look at the Daily timeframe to inspect previous price action and also provide guidance for future price development.
Three important features that should be given attention with regards to the progression of price action are provided below:
(i) Over a year and 2 months of price action in the USDJPY (i.e. from October 3, 2018 to current date) is described by a descending (or falling) wedge chart pattern. The ideal resolution of the chart pattern is to the upside. This therefore implies a break above immediate resistance that is highlighted on the chart.
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Movement above the upper boundary of resistance (109.827) will confirm the chart pattern and therefore can be used as part of a conservative strategy to initiate long (buy) positions. A successful breakout in this case is expected to maintain an upward bullish momentum for weeks to months.
(ii) Resistance between 109.827 and 109.174 presents immediate challenge to the bullish price swing from August 26, 2019. Lack of a breakout above 109.827 could result in the resumption of bearish momentum that pulls price back towards the lower boundary of the wedge.
(iii) Price currently trading above the 200 Day moving average is bullish for the USDJPY. Added bullish bias involves the slope of the moving average turning to the upside from its current downward slope. Price closing back below the moving average with the slope pointing downwards does not bode well for the USDJPY, and instead supports the development of bearish momentum.
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