- USDJPY in the green today ahead of this week’s key events
- It is now hovering below a key support area
- Momentum indicators confirm the weakening bearish pressure
USDJPY is trying to record a green candle today as it trades a tad below a strong support area. The bulls have managed to react to the sizeable correction from the November 13, 2023, high of 151.90, by defending the 200-day simple moving average (SMA) and then staging a small rally towards current levels. At the moment, market participants appear to be mostly on the sidelines and preparing for the upcoming key events.
In the meantime, the momentum indicators are confirming the evaporating bearish pressure.
The Average Directional Movement Index (ADX) is edging lower, towards its 25-threshold and thus signaling a weakening bearish trend. Interestingly, the RSI has failed to climb above its 50-midpoint, revealing the presence of bearish pressure. Crucially, the stochastic oscillator has climbed above the oversold area, but it appears to lack the strength for a sizeable move higher.
Should the bears remain hungry, they could first try to break below the September 7, 2022, high at 144.99. They could then face strong support at the busy 142.49-142.50 range, which is populated by 61.8% Fibonacci retracement of the October 21, 2022 - January 16, 2023, downtrend and the 200-day SMA. Even lower, a move towards the 139.38-140.69 area could allow the bears to record a new 4-month low.
On the flip side, the bulls are keen to recover part of their recent losses. They could successfully push USDJPY above the 146.65-147.71 area, but the March 24, 2023, ascending trendline could prove a stronger resistance area than currently foreseen. Even higher, they could have a go at the 50-day SMA and October 3, 2023, high at 149.53 and 150.15 respectively.
To sum up, USDJPY has recorded a small rebound, but market participants appear to be in a waiting mode ahead of the next key market events.