USD/JPY Reaches Overbought Region, Downward Move Is Expected

USD/JPY Reaches Overbought Region, Downward Move Is Expected

Key Resistance Levels: 111.000, 112.000, 113.000
Key Support Levels: 104.000, 103.000, 102.000

USD/JPY Price Long-term Trend: Bearish
The USD/JPY pair is on a downward move. A green candle body tested a 50% Fibonacci retracement level. The Yen will fall and reach a low of 2.0 Fibonacci extension level. In other words, the downtrend will extend to the low of level 103.50.

USD/JPY – Daily Chart

Daily Chart Indicators Reading:
The 50-day SMA and 21-day SMA are sloping downward indicating the bearish trend. The Yen is currently at level 47 of the daily Relative Strength Index. This indicates that the market is downtrend zone and below the centerline 50.

USD/JPY Medium-term Trend: Bearish
On the 4-hour chart, the Yen was earlier in a sideways move but now in an uptrend. Initially, the price fell to a low of 104.40 and resumed an upward move. The Yen is trading above level 105.00 and it has reached the overbought region.

USD/JPY – 4 Hour Chart

4-hour Chart Indicators Reading
The Yen is currently above the 80% range of daily stochastic. It is in a strong bullish momentum. Sellers may emerge to push prices down. The SMAs are sloping upward indicating the uptrend.

General Outlook for USD/JPY
The USD/JPY pair was earlier in an upward move. It appears the Yen has reached the overbought region of the market. Prices are likely to fall. According to the Fibonacci tool, the Yen will fall and reach a level at 2.0 Fibonacci extension level. That is, the pair will reach level 103.50.

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Author : Azeez Mustapha


Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.