1. Home
  2. »
  3. Trending Now
  4. »
  5. USD/JPY Oversold?

USD/JPY Oversold?

USD/JPY Oversold?, FP Markets

Charts: TradingView

The USD/JPY currency pair shed 5.4% over the course of last week, chalking up a near-full-bodied bearish candle and recording its largest one-week decline since 2008. Despite the monstrous sell-off, which ended at session lows, the long-term trend has been dominantly higher since 2021. In fact, year to date, the pair is 22% higher. As you can see from the weekly chart below, price tapped the lower side of Quasimodo resistance at ¥151.90 in October, which eventually led to last week’s fall.

So, overall, this may only just be another correction within the primary bull trend.

USD/JPY Oversold?, FP Markets

From the daily timeframe, support made a show at ¥139.55 and has appealed to buyers for now, a level aided by hidden bullish divergence from the relative strength index (RSI). Overhead, however, Quasimodo support-turned resistance at ¥141.60 serves as a potential headwind for the unit. South of the current support level is a decision point marked at ¥135.84-137.70, with a break unfastening the door to the 200-day simple moving average at around ¥132.84. Note that moving averages can offer dynamic support and resistance levels when tested (mean-reversion strategies, anyone?).

From the daily chart, should buyers continue to defend current support at ¥139.55 and dethrone resistance at ¥141.60, follow-through buying towards resistance at ¥144.95 might be in the offing. This would also be in line with the overall trend direction. Failure to hold ¥139.55, nonetheless, may see the decision point at ¥135.84-137.70 put in an appearance.

USD/JPY Oversold?, FP Markets

Shorter-term price action based on the H1 timeframe recently pencilled in a rebound from support at ¥138.86 that guided the pair north of the ¥140 psychological figure. This draws attention to a nearby supply zone at ¥142.46-142.25 which shares chart space with the daily timeframe’s Quasimodo support-turned resistance level at ¥141.60. Therefore, a whipsaw above the ¥141 level into H1 supply mentioned above could be seen, a move which might attract short-term bearish players into the market. However, do remember that the overall trend is directed to the upside, thus any bearish movement could be short-lived.

USD/JPY Oversold?, FP MarketsDISCLAIMER:

The information contained in this material is intended for general advice only. It does not take into account your investment objectives, financial situation or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, www.fpmarkets.com and should be considered before deciding to deal in those products. Derivatives can be risky; losses can exceed your initial payment. FP Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd trading as FP Markets ABN 16 112 600 281, Australian Financial Services License Number 286354.

 

  • USD/JPY Oversold?, FP Markets
    • Articles
    • Views
    AUTHOR

    FP Markets

    FP Markets is an Australian regulated broker established in 2005 offering access to Derivatives across Forex, Indices, Commodities, Stocks & Cryptocurrencies on consistently tighter spreads in unparalleled trading conditions. FP Markets combines state-of-the-art technology with a huge selection of financial instruments to create a genuine broker destination for all types of traders.

    PROFILE

Start
Trading
in Minutes

Open an account now


USD/JPY Oversold?, FP Markets Access +10,000 financial instruments
USD/JPY Oversold?, FP Markets Auto open & close positions
USD/JPY Oversold?, FP Markets News & economic calendar
USD/JPY Oversold?, FP Markets Technical indicator & charts
USD/JPY Oversold?, FP Markets Many more tools included

By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.