USD/JPY Encounters Key Resistance And Reverses To The Downside
- USD/JPY increased in correction from the 133.60 region.
- On the 4-hours chart, a significant negative trend line is present with resistance close to 137.50.
- Gains on the EUR/USD and GBP/USD are being stabilized above support zones.
- The $1,825 resistance level may serve as the target for a new upward move in gold prices.
Technical Analysis of USD/JPY
Below the 142.00 support level for the Japanese Yen, the US Dollar began a significant drop. Before it began an upward reversal, USD/JPY fell as low as 133.61.
The pair corrected above the 135.00 resistance area, according to the 4-hour chart. The bearish movement from the 133.61 low to the 139.89 swing high saw a rise above the 50% Fib retracement line.
The pair, however, encountered significant resistance close to the 137.50 area and continued to trade below both the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours). On the same chart, a significant bearish trend line is also seen with resistance located close to 137.50.
The pair is seeing resistance near the 137.50 level on the upswing. The 100 simple moving average and the area around 138.50 may serve as the next significant barrier (red, 4-hours). Another solid gain might begin with a clear break above the 138.50 resistance.
In the scenario described, the USD/JPY pair might test 140.00. Any further gains might pave the stage for a move in the direction of the 142.50 resistance region.
In the absence of an upside break, the pair may begin a new drop. The first level of support is close to 136.00. The 135.00 zone is the next significant area of support. The pair may move toward the 133.60 support area if there are any additional losses.
The bulls are visible and active when it comes to the price of gold, and there is potential for another rise toward the $1,825 resistance area.
Economic Announcements to Trade Today
- US Producer Price Index for November 2022 (YoY) Forecast: +7.4%, versus +8.0% previous
Author: Amogo Solomon
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