- The USD/JPY pair failed to capitalize on the weekly bullish gap opening and struggled to extend the momentum further beyond mid-108.00s.
- Bearish traders looked to seize back control on Tuesday, though the pair has still managed to hold its neck above the 108.00 round figure mark.
The pair has now retreated back closer to an important confluence resistance breakpoint now turned support – comprising of 20-day SMA, 23.6% Fibo. level of the 112.40-106.78 downfall and the top end of over two-month-old descending trend-channel.
Technical indicators on the daily charts fell short of moving back into the bullish territory and have been gaining negative momentum on the 1-hourly chart, pointing to the emergence of fresh selling pressure amid concerns over the global economic downturn.
Meanwhile, oscillators on the 4-hourly chart maintained their bullish bias and warrant some caution before placing any aggressive bearish bets. Hence, it would be prudent to wait for a sustained break below the 108.00 mark before positioning for any further slide.
Below the mentioned handle, the pair is likely to accelerate the slide towards 107.35-30 horizontal support before eventually dropping to the 107.00 round figure mark en-route multi-month lows support near the 106.80-75 region.
On the flip side, the 108.70-75 supply zone might now act as a key trigger for short-term bullish traders, above which the pair is likely to surpass the 109.00 handle (nearing 38.2% Fibo. level) and aim towards challenging the next major resistance near the 109.30-35 region.
USD/JPY daily chart
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