USD/JPY Up 181 Pips, in a Downtrend Over Past 30 Days; Price Base in Formation Over Past 14 Days

USD/JPY Price Recap

107.665 (USD) was the opening price of the day for USD/JPY, resulting in yesterday being a day in which price moved up 181 pips 1.71% from the day prior. The price move occurred on stronger volume, as measured by the number of tick price changes; specifically, yesterday’s volume was up 28.76% from the day prior, and up 9.18% from the same day the week before. Out of the 40 instruments in the Forex asset class, USD/JPY ended up ranking 4th for the day in terms of day-over-day price change. Below is a price chart of USD/JPY.

USD/JPY Technical Analysis

The first thing we should note is that the current price of USD/JPY is sitting close to its 20, 50, 100 and 200 day moving averages; moving average crosses often indicate a change in momentum, so this may be worth keeping an eye on. As for the alignment of the moving averages, well, it’s a bit mixed up; the 20, 50, 100, and 200 do not progress from largest to smallest, or vice versa. The closest is the 20 day average, which is 18 pips away. The clearest trend exists on the 30 day timeframe, which shows price moving down over that time. Also of note is that on a 14 day basis price appears to be forming a base — which could the stage for it being a support/resistance level going forward. For additional context, note that price has gone down 8 out of the past 14 days. Moreover, we’re also seeing a bullish engulfing pattern; this may be especially noteworthy in light of the downtrend on the 30 and 90 day charts, as in this context the bullish engulfing candles may indicate the bear trend may be ending.

The View From Around the Web

We’re seeing some traders come out with interesting conviction on USDJPY, with 12 buy signals on our radar and 20 sell signals. This imputes a buy/sell ratio of 0.6, which is bearish. As for the rationale, technical traders seem to be citing the appearance of a fibonacci technical pattern. Here’s a piece we found on tradingview.com; below is a short snippet from it to give you a taste.

Hi traders, the USD/JPY pair closed this week’s downside gap on a broad USD strength, but the Nikkei and SPX still show a strong divergence to the downside….The dollar index is reaching multi-year highs near 100 and the 2y and 5y US yields don’t show to be catching up with the dollar….From a technical standpoint, the pair reached the 61.8% Fib level of the recent down-move which formed a confluence with a strong daily resistance.