USD/JPY has been in a free-fall mode since Friday, while today, it dipped below the upside support line drawn from the low of May 6th. Although the tumble appears very steep, with no signs that this could be altered soon, we would consider the near-term outlook to be negative for now.
The rate now looks to be headed towards the 107.10 territory, which is marked as a support by the low of May 29th. If the bears are strong enough to overcome that hurdle, then we may see them targeting the low of May 13th, at around 106.75. Another dip, below 106.75 may carry larger bearish implications, perhaps paving the way towards the 106.20 zone, defined as a support by the low of May 8th.
Shifting attention to our short-term oscillators, we see that the RSI has just crossed below 30 and continues to point south, while the MACD lies below both its zero and trigger lines, pointing down as well. Both indicators suggest strong downside speed and support the notion for further declines in this exchange rate.
In order to start examining the bullish case, we would like to see a strong recovery above today’s peak, at around 107.86. This would take the rate above the aforementioned upside line and may initially open the path towards the 108.25 barrier, marked by an intraday swing high formed yesterday, as well as by the inside swing low of Monday. If that level is not able to stop the bulls either, then extensions towards the 108.62 area could be possible. That area is marked as a resistance by the inside swing low of June 4th.
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading CFDs with the Company. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.
Copyright 2020 JFD Group Ltd.