USDJPY attempted to break below its multi-day range on Thursday after the price was repeatedly capped by the daily cloud top and 200DMA. The technical outlook now turns on daily closes relative to the range floor.
USDJPY fell 0.8% in late Asian and early European trading on Thursday and attempted to break below its multi-day range. Before the drop, the daily cloud top and the 200DMA had repeatedly capped the price.
The move weakens the daily chart structure. The pair moved deeper into the thick daily cloud and broke below the daily Kijun-sen at 157.16, which puts pressure on the next significant support at 156.68, the 38.2% Fibonacci retracement of the 152.88/159.03 upleg.
Momentum points the same way. The falling 14-day indicator broke into negative territory, which adds to the negative near-term outlook. A daily close below 157.50, the range floor, is the minimum requirement to keep fresh bears in play.
A break and close below 156.68 would confirm the negative signal and open the way to a deeper drop that may challenge the daily cloud base at 155.65. Alternatively, a return and close within the existing range would signal a false break lower and keep the price in prolonged sideways mode.
Only a sustained break above the 200DMA and cloud top would be a game changer.
Source: ActionForex
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