USDJPY Shifts Sideways; Broader Picture Bearish

Technical analysis of Forex market

USDJPY despite improving from the significant 104.00 support zone is transmitting a neutral-to-bearish tone, curbed by the gradual dip in the 100- and 200-period simple moving averages (SMAs). The flattening 50-period SMA is endorsing the horizontal price action, while mixed signals in momentum exist in the short-term oscillators.

The MACD is increasing above its trigger and zero lines, while the RSI is attempting to maintain its positive drive above the 50 threshold. However, the stochastic oscillator has adopted a bearish tone as the %K and %D lines dive under overbought territory, promoting further fading in the pair.

If selling interest strengthens, early support may arise from the 50-period SMA at 104.57 and the neighbouring low of 104.50. Steeper declines may then encounter the significant foundation of 103.99 – 104.11. Should the bears breach this floor, the price may sink towards the 103.66 level, that being the 76.4% Fibonacci retracement of the up leg from 101.17 to 111.71.

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To the upside, heavy constrictions may originate from the critical section of 104.94 to 105.05, which also contains the 100-period SMA. Surpassing this key boundary, the climb may be challenged by the region from the 200-period SMA at 105.14 until the 105.29 inside swing low, an area which also encompasses the 61.8% Fibo of 105.20. Triumphing above these barriers may propel the pair towards another resistance region of 105.70 – 105.80.

Summarizing, USDJPY retains a neutral-to-bearish mode below the 100- and 200-period SMAs. A break below the 104.00 base may accelerate negative moves, while a shift above 105.70 – 105.80 may turn the bias neutral.