USDJPY Price Analysis – May 29
Further increase in the Bears’ pressure may lead to the breakdown of $108 demand level. Should the Bulls defend the demand level of $108, the price may reverse.
Supply levels: $110, $112, $114, $117
Demand levels: $109, $108, $107, $104
USDJPY Long-term trend: Bearish
The bearish movement continues in the USDJPY market on the long-term outlook. After three days when the USDJPY price dropped to the demand level of $108, the bearish trend was weak and the Bulls took over the market. The currency pair rallied towards the dynamic resistance and support of 21 and 50 periods EMA. The confluence at the level would not allow the pair to pass through. The bearish movement started from that point last week and the price is decreasing towards the previous low at $108 level.
The gap between the two EMAs is increasing and the 21 periods EMA and the 50 periods EMA are above the currency pair. That means, USDJPY price is trading below the 21 periods EMA and 50 periods EMA to connote bearish momentum. The Relative Strength Index period 14 is below 40 levels and the signal lines bending down to indicate sell signal and a further reduction in USDJPY price. Further increase in the Bears’ pressure may lead to the breakdown of $108 demand level. Should the Bulls defend the demand level of $108, the price may reverse. Meanwhile, the price has formed a descending channel on the daily chart.
USDJPY Medium-term Trend: Bearish
On the 4-hour chart, USDJPY is bearish. A descending channel has formed on the 4-hour chart. An attempt made by the Bulls to rally towards $112 level after it broke up the $110 level failed when the currency pair met the resistance at the upper trend line of the channel. The pair dropped below the $110 and moved down to the demand level of $109 where it is currently reversing.
The RSI is above 50 levels and the signal line pointing up to indicate a buy signal.
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