USDJPY turned red on Tuesday after its five-day bullish rally stalled near July’s resistance of 137.45, but the bears will probably need to work harder to stay in power.
Although the negative intersection between the 20- and 50-day simple moving averages (SMAs) keeps promoting a trend deterioration, the price is still trading above those lines. Meanwhile, the RSI and the MACD remain elevated within the bullish area despite softening a bit lately; the former comfortably above its 50 neutral mark and the latter positively charged above its red signal and zero lines.
A decisive extension below the 135.58 – 134.93 constraining zone, which encapsulates the 50-day SMA too, could raise negative risks, likely pressing the price towards the tentative short-term support trendline seen around 133.60. Moving lower, the broken resistance trendline drawn from July’s highs may next come on the radar at 132.57. If it proves fragile, the bears may attempt to attack the neutral short-term outlook below the 131.53 – 130.38 base.
Alternatively, buyers may try to push above the 137.45 bar once again and breach the 138.97 – 139.37 ceiling, where the ascending line from March lows is located. If they succeed, the uptrend may stretch towards the 142.50 restrictive territory last active during summer 1998. Beyond that, all attention will shift to the 1998 top of 144.38 – 147.71.
In brief, USDJPY may have another opportunity to resume its bullish momentum, but for that to happen the 135.58 – 134.90 area will need to add a strong footing under the price.
