USDJPY bears have regained momentum after hitting March 2020’s key resistance level. USDJPY found resistance around 110.50 event area. Can the price retrace further lower in the coming days? What are the charts and technical indicators are saying? Read more to find further insights into today’s USD/JPY Technical Analysis.
April 6, 2021, | AtoZ Markets – USDJPY is currently trading around 110.20 area and trying to push lower. After rejecting 111.00 to 110.90 key resistance level, the price has become quite volatile and corrective, but the bears managed to have a daily bearish candle close below 110.50 to 110.40 area. As per the current price action, the price may face strong support around 109.90 to 110.00 area in the coming days.
In addition, Japan would concede to another portion of special drawing rights (SDR) as long as the World Bank and International Monetary Fund aid guarantee straightforwardness in giving the expanded cash to helpless nations, Finance Minister Taro Aso said on Tuesday. On the other hand, on Monday, President Joe Biden protected his proposition to increase corporate taxes to help pay for his framework spending plans, saying he was not stressed the climb would hurt the economy and that there was no proof it would drive business overseas.
USDJPY Found Resistance as the Price Requires a Downside Retracement
USDJPY is currently residing near 110.20 area and trying to decline further. Moreover, the price also broke below the dynamic level of 20 EMA on the intraday chart.
Image: USDJPY 4 Hour Chart
According to the 4-hour chart, USDJPY found resistance and currently trading around 110.20 area. As per the current scenario, the bears may push the price down towards 110.00 to 109.90 area in the process. So, if the price can break below 110.00 to 109.90 support area with an impulsive bearish candle, the price may decline towards 109.20 to 109.00 area in the days ahead. On the contrary, if the price bounces upside from 109.90 to 110.00 area with a bullish candle, the bulls may regain momentum and push the price upward towards 110.40 to 110.50 area in the coming days.
Furthermore, the dynamic level of 20 EMA is currently residing above the price. Along with the Kijun line and Tenkan line. So, the dynamic level may act as strong resistance to push the price downward. Besides, the Kijun line and the Tenkan line may work as a confluence of the dynamic level in the process. However, the Kumo Cloud is still residing below the price. Therefore, it may hold the price as strong support in the days ahead.
USDJPY May Retrace Towards the Dynamic Level
According to the daily chart, USDJPY found resistance and currently trading around 110.20 area. As per the current price action context, the price may retrace towards 109.20 to 109.00 area in the coming days. So, if the price retraces towards 109.20 to 109.00 area and bounced upside with a daily bullish candle, the bulls may sustain the bullish trend towards 110.90 to 111.00 area as a first target. The second target will be 111.80 to 112.00 area if the price can break above 110.90 to 111.00 area in the days ahead.
Image: USDJPY Daily Chart
In addition, the dynamic level of 20 EMA is currently residing below the price. So, it may pull the price downside as a mean reversion. Along with this, the MACD lines are currently residing above the 0.00 and may have a bearish crossover. Besides, the histogram has created a bearish divergence. Both indicate that the price may retrace downward in the process.
To conclude, after an impulsive bullish momentum, the price requires a downside retracement. An impulsive daily close will help to identify the definite momentum in the coming days.