USD/JPY is currently experiencing a downtrend, with both short and medium-term trends appearing bearish. The pair is aiming for the October 2021 high in the 151s after a recent sell-off following a peak in July. As the saying goes, “the trend is your friend,” indicating a potential further decline in the near future.
Technical Analysis
On the daily chart, USD/JPY has already reached its conservative downside target at 154.90, the 61.8% Fibonacci extension from a previous downtrend. It is now approaching 153.21, the 100% extension, with a possible further drop to 151.84, a key support level. The Relative Strength Index (RSI) is nearing oversold territory, suggesting a potential pullback or consolidation before further downside.
Conclusion
While the long-term trend remains bullish, a break below 151.84 could cast doubt on this outlook. Traders should monitor the RSI levels for potential reversal signals and be prepared for further downside towards the October 2021 high.