USDJPY has been constrained between the support-turned-resistance trendline and the 20-day simple moving average (SMA) over the past week, unable to clearly close above the 114.00 level ahead of the FOMC policy announcement.
The upward slope in the shorter-term SMAs is endorsing the bullish market structure from September’s lows, but the momentum indicators are foreseeing depressed trading in the coming sessions. Specifically, the RSI continues to make lower highs and lower lows towards its 50 neutral mark, the MACD remains negatively charged below its red signal line, while the Stochastics seem to be pivoting southwards again, all reflecting a gloomy mood in the market.
Nevertheless, the focus will remain on the supportive 20-day SMA at 113.80, a break of which could bolster selling interest towards the 23.6% Fibonacci of the 109.11 – 114.69 upleg at 113.37. A more aggressive decline could reach the 113.00 round number, while lower, the bears may head for the 38.2% Fibonacci of 112.55. Yet only a sustainable move below the 112.00 bar and the 50% Fibonacci would downgrade the broader outlook back to neutral.
Should the 20-day SMA stand firm, with the price also closing above the red Tenkan-sen line once again, the bulls may advance to challenge the 114.45- 114.69 ceiling. Another extension higher from here may then encounter the 2017 boundary of 115.50.
In brief, the technical picture is currently looking discouraging for USDJPY, with selling forces expected to intensify below 113.80.
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USD/JPY Constrained Below 114.00 Ahead Of FOMC Policy Decision
ByXM Group
AuthorTrading Point
Published 11/03/2021, 07:11 AM
USD/JPY Constrained Below 114.00 Ahead Of FOMC Policy Decision
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