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16/09/24
104
USD/JPY Dips to Key Support as Bearish Trend Persists
The USD/JPY currency pair continues its decline, extending a bearish trend for a fifth consecutive day. Currently trading around 140.30 during the Asian session, the pair has been navigating within a descending channel, which solidifies the prevailing negative sentiment surrounding the asset. In technical analysis, the position of the nine-day Exponential Moving Average (EMA) below the 21-day EMA further indicates the continuation of downward pressure on prices.
As the USD/JPY approaches a crucial support level at 140.25, it finds itself at the lowest point since July 2023. Should the pair manage to break below this threshold, it could heighten the bearish outlook and lead the market to test the next significant support level at 140.00. A breach of this psychological barrier may pave the way for further declines, potentially reaching the lower boundary of the descending channel near 138.50.
On the other hand, analysis of momentum indicators reveals that the 14-day Relative Strength Index (RSI) is currently in oversold territory, indicating the possibility of an impending corrective bounce. This situation could be an opportunity for traders seeking a reversal. If the USD/JPY manages to rally, immediate resistance is anticipated at the nine-day EMA, roughly around 142.19, followed by the 21-day EMA at approximately 144.04.
Breaking through these resistance levels may signal a reversal in sentiment, allowing the pair to test the upper boundary of the descending channel at 145.50. As traders monitor these movements closely, the USD/JPY’s next steps will be pivotal in determining its trajectory in the coming days.
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