USDJPY has been trending downwards after the price peaked at the 4½-year high of 115.51 in late November. However, after its decline halted, the pair has adopted a more sideways pattern. Recently, the short-term picture seems to be deteriorating as the price has crossed below both its 50 and 200-day simple moving averages (SMAs).
This recent downside move is likely to resume as the momentum indicators endorse the pair’s bearish immediate-term bias. More specifically, the stochastic oscillator is sloping downwards after posting a bearish crossover, while the MACD is found beneath both zero and its red signal line.
Should the negative momentum strengthen and the price drops below the recent low of 113.40, initial support might be encountered at the 113.14 region. Falling beneath this barrier, the spotlight would turn to 112.97. Breaching these hurdles, the bears might then target the 112.73 obstacle.
On the flipside, if the bulls manage to retake control, the pair may meet resistance at the most recent high of 113.60. Overcoming this resistance point, the focus would turn to the 113.82 level, which overlaps with the pair’s 200-day SMA. Higher up, the price could climb towards the 113.95 barricade, before the bulls aim at the 114.25 region.
Overall, USDJPY has been moving without a clear direction in the medium-term, but the near-term picture seems to be worsening. Only a clear break above 114.25 could alter the medium-term picture back to positive.
