The US Dollar (USD) extended upside movement against the Japanese Yen (JPY) on Tuesday, for the fourth day in a row, increasing the price of USD/JPY to more than 119.50. The technical bias however remains bearish because of a lower low and lower high in the recent wave.
The pair yesterday traded within a 50 pips range around the 119.35 level, the 38.2% retracement of its latest weekly decline, having been unable to advance steadily on spikes above the level. Following last week’s decline down to 118.05 the pair has reentered the range that contained the price since late August, although it continues holding near the base of it, risking another break lower in the upcoming days.
Technically, the 1 hour chart shows that the price is between its 100 and 200 SMAs, with the largest acting as an immediate intraday resistance around 119.65, and both presenting bearish slopes. In the same chart, the technical indicators have eased from their early momentum and stand now flat around their mid-lines.
In the 4 hours chart, the recovery stalled well below the 100 and 200 SMAs, whilst the Momentum indicator turned sharply lower, but still holds above its 100 level, whilst the RSI indicator is turning south around 52. At this point, the pair needs to break below 118.90 to confirm a bearish continuation, with some steady gains above the mentioned 119.65 level favoring a test of the 120.00 region.
Considering the overall technical and fundamental outlook, buying on dips could be a good strategy as long as long as the 116.00-122.00 range is intact.