As we review the market dynamics, USD/JPY has demonstrated a significant bearish trend, reinforced by recent economic developments. The chart exhibits a steady decline, indicating strong selling pressure.
Technical analysis: The USD/JPY pair has breached key support levels, currently navigating below the 141.400 mark. The consolidation box, highlighted on the chart, represents a period of indecision from which the pair has decisively broken down. It tried to break the 142.800 resistance, but the sell volume was stronger than the buy volume, pushing the price further down. Volume bars accompanying the downward trend suggest a high conviction among sellers. If the pair fails to break the lower boundary of the consolidation zone around 142.00, this could cement the bearish outlook, setting the stage for further declines.
Our position: In light of the current technical setup, caution is warranted for bulls. Traders may consider monitoring for any potential retracement towards the consolidation zone as an opportunity to evaluate the strength of the bearish momentum. Should there be a lack of bullish signals and a continued stance below 141.00, the market could present shorting opportunities, targeting further support levels. We are looking for a retracement and retest of the 142.00 level.
Technical analysis: The USD/JPY pair has breached key support levels, currently navigating below the 141.400 mark. The consolidation box, highlighted on the chart, represents a period of indecision from which the pair has decisively broken down. It tried to break the 142.800 resistance, but the sell volume was stronger than the buy volume, pushing the price further down. Volume bars accompanying the downward trend suggest a high conviction among sellers. If the pair fails to break the lower boundary of the consolidation zone around 142.00, this could cement the bearish outlook, setting the stage for further declines.
Our position: In light of the current technical setup, caution is warranted for bulls. Traders may consider monitoring for any potential retracement towards the consolidation zone as an opportunity to evaluate the strength of the bearish momentum. Should there be a lack of bullish signals and a continued stance below 141.00, the market could present shorting opportunities, targeting further support levels. We are looking for a retracement and retest of the 142.00 level.
Comment:
Price is recovering just as expected. Making a reversal on Friday, just before the end of the year. The 142.00 level is crucial now. If it breaks it, it might indicate a trend reversal and we have to re evaluate our stance. If it respects the level, creating a retest and continuation, we are entering our positions.