USDJPY appears well-set to reverse the previous weekly gains as it reverses from a three-week-old descending resistance line surrounding 141.00. Also adding strength to the downside bias could be the pair’s break of a fortnight-old support line’s break, as well as bearish MACD signals. However, the below 50.0 levels of the RSI challenges the Yen pair as US Dollar bulls flex muscles ahead of the Fed’s favorite inflation clue, namely the Core PCE Price Index. It’s worth noting, however, that the quote’s recovery remains elusive below 141.00 while the 200-SMA and multiple technical levels marked since June 19 and a 61.8% Fibonacci retracement of the June-July downside together constitute the 142.00-10 area as a tough nut to crack for the bulls.
On the contrary, USDJPY sellers need validation from the 23.6% Fibonacci retracement near 139.00 to rule further. Should the Yen pair remains bearish past 139.00, tops marked in March and May around 137.70 and the monthly low near 137.25 will act as the final defenses of the major currency pair. If at all the quote drops beneath 137.25, May’s bottom of near 133.50 and the 130.00 threshold will lure the sellers.
Overall, USDJPY is likely to add to the weekly gains but US data appears crucial to watch for clear directions.
