USDJPY broke below 107.70 area and may pause now. After rejected from 112.20 key resistance area, USDJPY pushed the price down quite impulsively. Let’s check USDJPY Technical Analysis for more levels and insights.
March 4, 2020 | AtoZ Markets – USDJPY has been quite non-volatile and impulsive after rejected from 112.20 key resistance area. After an extended period of Bearish momentum, USDJPY faces support near 106.80 area. USDJPY broke below 107.70 may retrace higher before Bearish momentum takes place.
The Japanese Yen gained momentum against the U.S. dollar this week, hope for Global monetary easing the policies and fights the economic harm from the Chinese Coronavirus. G7 (The Group of Seven) and Central Bank governors was held a conference earlier this week, to discuss how to deal with the Chinese Coronavirus outbreak and its economic breakdown. Moreover, Lee Hardman, Currency Economist at MUFG, said, “I think there is some disappointment on the back of the Reuters report that there’s unlikely to be an explicit stimulus.”
On the other hand, the U.S. Dollar dropped yesterday after the Federal Reserve System cut the interest rates on 50 basis point. But the Fed failed to pleasure fears over the Global Economic fall down from the spread of the Coronavirus. The FED rates cut took place before the regular schedule policy meeting. The last time FED cut the interest rates before the schedule was in October 2008 at the high time of the global economic crisis. The Fed Chairman Jerome Powell made a statement at a press conference that, “We do recognize that a rate cut will not reduce the rate of infection, it won’t fix a broken supply chain.”
USDJPY Broke Below 107.70 may Push Higher after Correction
The USDJPY was dropped after facing resistance at 112.20 area. Bearish momentum sustained well and pushed the price down quite impulsively. However, Bulls may take over the market after a certain correction.
Image: USDJPY 4 Hour Chart
According to the 4-hour chart, USDJPY is now residing near 107.60 and trying to push higher continuously. After a rejection from 112.20 key resistance, USDJPY Bearish pressure pushed the price down towards 106.80 area. If the price can break above 107.70 area and retrace, the Bullish pressure may continue further towards 109.20 next resistance.
Moreover, the dynamic level of 20 EMA is residing above the current price, along with the Kijun line and the Tenkan line. It may pull the price higher and may become support in the upcoming events. On the other hand, the MACD lines are crosses each other upward, which indicates that Bulls may take over the market soon.
Bearish Pressure may Sustain Further after Retracing Higher
According to the Daily chart, USDJPY broke below 112.20 after a rejection and moved lower towards 106.80 quite impulsively. USDJPY engulfed the whole price action of the last three months in just a week. It may continue Bears pressure, but a certain retracement may take place higher towards 109.20 area.
Image: USDJPY Daily Chart
Moreover, the dynamic level of 20 EMA is far away from the current price, along with the Kijun line and the Tenkan line. It may pull the price higher at least 109.20 area as Mean Reversion.
To conclude, USDJPY Bearish pressure may continue after retracing higher towards 109.20 area at least. If the price able to retrace higher, the Bearish pressure may sustain further towards 106.80 area again in the coming days.