USDJPY has retreated from its January high, crossing below its 50-period simple moving average (SMA) amid strengthening negative forces. However, despite the short-term negativity, the pair’s overall outlook is still positive amid successive higher highs and higher lows.
Short-term momentum indicators are supporting a negative bias as the RSI is located below its 50 neutral mark. Also, the MACD is found below zero and its red signal line, which could indicate that the negative bias might be gaining more traction.
Should the bulls regain control, initial resistance might be found at the region which includes the 50-period SMA currently at 115.54, and the 115.61 level. Crossing above this area could reignite the pair’s positive momentum, opening the door towards the 116.34 barrier, before buyers shift their attention towards the 2017 mid-January high at 116.85.
On the flip side, if the price breaks below the congested region which encapsulates the 115.03 and the 114.94 level, immediate support might be found at the 114.66 hurdle. A decisive move below the latter could intensify selling pressures, paving the way towards the area which includes the 200-period SMA and the 114.26 obstacle.
In brief, the overall outlook for the pair is bullish despite some short-term risks to the downside. For sentiment to change, sellers would need to drive the price below the 200-period SMA.
