USDJPY has become impulsive and non-volatile after rejecting 105.50 to 105.60 resistance. USDJPY dropped below 105.00 psychological event level. Bears to continue downside? What are the charts and technical indicators are saying? Read more to find further insights into today’s USDJPY Technical Analysis.
October 27, 2020, | AtoZ Markets – USDJPY is currently trading around 104.75 area and trying to decline. After breaking below 105.00 support level, the bears pushed the price quite aggressively and hit the 104.35 area. As per the current price action, the price retraced higher and rejected by the dynamic level of 20 EMA on the intraday chart.
The United States, on Monday forced new Iran-related authorizations focusing on the Islamic Republic’s oil area, including the Iranian Ministry of Petroleum, in Washington’s most recent move to build pressure on Tehran. Moreover, Treasury Secretary Steven Mnuchin said in the announcement, “The governance in Iran utilizes the oil area to finance the destabilizing exercises of the IRGC-QF.”
On the other hand, The Bank of Japan is set to keep financial policy constant on Thursday and sign its availability to expand the time of an emergency response package that has become an essential tool to manage the deepening financial effect of the Covid-19 crisis.
USDJPY Dropped Below as the U.S. – Iran Tensions Rise Again
USDJPY is currently trading around 104.75 area and trying to push downside. However, the price also broke below the Kijun line and the Tenkan line, according to the intraday chart.
Image: USDJPY 4 Hour Chart
According to the 4-hour chart, USDJPY dropped below and currently residing near 104.75 area. As per the current price action, if the price can break below the last candle’s low with an impulsive bearish candle, the bears may sustain the bearish pressure towards 104.20 to 104.00 area in the coming days. Alternatively, if the price pushes upward and breaks above 105.00 to 105.10 area, the bulls may regain momentum and recover upside towards 105.50 to 105.60 area in the days ahead.
In addition, the dynamic level of 20 EMA is currently residing above the price. Along with the Kijun line and the Tenkan line. The dynamic level may act as strong resistance to push the price downside. Besides, the Kijun line and the Tenkan line may work as a confluence of the dynamic level in the days ahead. On contrary, the bulls may regain momentum if the price can break above the dynamic level.
USDJPY Bears May Decline Towards March’s Low
According to the daily chart, USDJPY dropped below with an impulsive bearish candle. As per the current price action, if the price can have an impulsive bearish candle close below 104.60 area, the bears may push the price towards 104.20 to 104.00 area as a first target. Along with this, the second target will be 103.10 to 103.00 area if the price can break below 104.20 to 104.00 area in the coming days.
Image: USDJPY Daily Chart
Furthermore, the dynamic level of 20 EMA is currently residing above the price. It may work as strong resistance in the process. Also, the MACD lines are residing below the 0.00 level for an extended period. It indicates that bears are still in the market may decline further in the days ahead.
To conclude, after an extended period of volatility, bears were able to broke below the psychological support level. A daily close is required to identify the definite momentum in the process.