Midweek Technical Look – USDJPY, EURGBP, Oil
USDJPY shows some stress; still in an uptrend
USDJPY came under pressure early on Thursday, trimming Wednesday’s moderate gains and putting its two-month-old bullish channel at risk once again.
The technical signals are not providing clear direction, with the falling RSI maintaining a sideways trajectory above its 50 neutral mark and the stochastic oscillator pointing down despite posting a positive cross.
Perhaps a downside correction may not scare traders and could still be an opportunity to buy the dip unless the price slumps below the 153.00-153.55 area, breaking below the 20-day exponential moving average (EMA) and beneath a shorter-term bullish channel. If that proves to be the case, selling forces could intensify toward the 50-day EMA and the 50% Fibonacci mark of 150.75. Note that the 200-day EMA is also nearby at 150.25. Hence, if it gives way too, there is potential for a sharp decline to 148.11.
In the bullish scenario where the price advances above 155.40, it could head straight up to the resistance area of 157.00-157.70. Should the former barrier of 158.35 prove fragile as well, the rally could speed up to 159.35 taken from April-May 1990 and then push toward the channel’s upper band seen near 160.50.
Overall, the uptrend in USDJPY seems to have geared down, shifting to a lower bullish channel. While downside risks have not evaporated, only a decline below 153.00-153.55 could activate fresh selling orders.
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