USDJPY ticks marginally up, but momentum is weak

USDJPY is moving slightly higher within the medium-term downward sloping channel, but the momentum is weak to continue the bullish structure above the 50.0% Fibonacci retracement level of the upward wave from 114.64 to 151.93 at 133.10.

The MACD is rising somewhat above its trigger line in the bearish area; however, the RSI is flattening in the negative territory. Also, the 50- and the 200-day simple moving averages (SMAs) are approaching each other suggesting a death cross in the next sessions.

Should the buying interest remain, and the pair surpasses the immediate 50.0% Fibonacci at 133.10, which overlaps with the 20-day SMA then the bulls may manage to challenge the 134.50 barrier ahead of the 200-day SMA at 136.60, penetrating the descending channel to the upside. Above this line, the 38.2% Fibonacci at 137.55, which lies near the 50-day SMA may halt the positive actions as well.

On the other hand, a move lower could meet the seven-month trough of 129.50 before testing the crucial 61.8% Fibonacci of 128.70, which will be a significant step for a longer-term bearish structure. Beneath that, the 126.30 bottom, registered in May 2022 could come next.

All in all, USDJPY is bearish and only a move above the 200- and the 50-day SMAs may switch the outlook to bullish.

About the author

Melina Deltas

Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups. Her technically focused method looks mainly at price action across multiple time frames to capture big moves that develop over the years. She has more than 3 years of experience in analyzing financial markets, specializing in forex, indices, and commodities. Melina studied Pure Mathematics at Lancaster University and has a Master's Degree in Monetary and Financial Economics from the University of Cyprus. Currently, she is an associate member of the Society of Technical Analysts (STA) and a Certified Financial Technician (CFTe).