The USD/JPY pair is showing a downward bias, with a daily close below 142.00 indicating the potential for further losses towards 140.71 and 140.25. Bears are currently in control, supported by flat RSI levels suggesting consolidation before the next move.
If there is an upward correction, resistance levels to watch out for include 142.00, followed by 143.04, and key levels at 143.96 (Tenkan-Sen) and 144.50 (Senkou Span A).
The recent decline in USD/JPY from the peak of around 143.00 was triggered by mixed economic data from the US, increasing the likelihood of the Federal Reserve’s first rate cut next week. As of now, the pair is trading at 141.96.
Technical Outlook for USD/JPY
Despite the downward bias, Wednesday’s long tail suggests a possible upward correction in the near future, with key resistance levels to be tested. Bears remain dominant, as indicated by the RSI, hinting at a period of consolidation before the next major move.
If USD/JPY closes below 142.00 on a daily basis, traders may push prices towards the September 11 low at 140.71, followed by the December 28, 2023, cycle low of 140.25. On the upside, the first resistance level is at 142.00, with further hurdles at 143.04, 143.96 (Tenkan-Sen), and 144.50 (Senkou Span A).
Analysis
The Japanese Yen (JPY) is heavily influenced by factors such as the performance of the Japanese economy, the Bank of Japan’s policies, and risk sentiment among traders. The recent decline in USD/JPY was driven by mixed US economic data, raising expectations for a Fed rate cut. Traders should pay attention to key support and resistance levels to navigate potential losses or gains in the USD/JPY pair.