As of Wednesday’s North American trading session, the USD/JPY currency pair was rising modestly. Retreating back near the 143 floor. Despite this minor bullish advance, the pair is still trapped under all major moving averages which would suggest further struggle against upward pressure. That performance, good and bad alike, is a result of continued downward pressure on the US dollar. This environment has constrained the duo’s capacity to lengthen its victories.
USD/JPY is currently trading just below the 143 level, but has several technical obstacles to overcome. The 20-, 100- and 200-day Simple Moving Averages suggest a move back down is in the cards. This is a very negative picture for speculative traders. The Relative Strength Index (RSI) is currently around 32, indicating that the pair is approaching the oversold zone. While this technical indicator might suggest a correction is coming any time soon, the macro market fundamentals are still cautious.
The pressure on the USD/JPY pair is compounded by the fact that the US Dollar Index has dropped even further on the day. This loss of strength in the dollar makes future upward moves in the currency pair unlikely to be significant. Key support for USD/JPY seen at 142.41, with downside targets thereafter at 141.80. Traders will be watching these thresholds closely as a break below them may indicate the start of a bearish trend.
Should the USD/JPY be able to mount a successful recovery, resistance levels are likely at 145.47. After that, the next resistance levels come in at 145.79 and 146.62. These marks will be important touchstones for any future recovery efforts. Yet any upside attempts will find heavy headwinds at play given the current market sentiment and negative technicals.
The Williams Percent Range suggests a potential bounce could be on the horizon, but this is counterbalanced by other indicators that remain neutral. The disparate tech signals underscore the challenge and difficulty present for the USD/JPY currency pair in today’s unique trading landscape.
That said, the overall tone to the market remains wary with the US dollar still coming under pressure. The USD/JPY is finding it difficult to break out above the important moving averages. This restriction has limited its odds of breaking conclusively above the resistance zone. As a result, traders remain vigilant, assessing both macroeconomic factors and technical signals to gauge future movements in this currency pair.