The USDJPY pair gains some positive traction for the fourth straight day on Monday and climbs to a one-week high during the early European session. The pair is currently placed just below the 141.00 mark, with bulls still awaiting a sustained move back above the 100-day Simple Moving Average (SMA) support breakpoint.

The market sentiment remains fragile amid concerns about economic headwinds stemming from the worsening COVID-19 situation in China and the imposition of fresh lockdowns in several financial hubs. Adding to this, fears of a potential escalation in the Russia-Ukraine conflict temper investors' appetite for riskier assets. Even from a technical perspective, the recent repeated failures near the 141.00 support breakpoint warrant some caution for aggressive bullish traders and positioning for any further near-term appreciating move for the USDJPY pair.

So long as the price stays on the front side of the daily trendline, there will be prospects for a significant bullish correction in the days ahead.

Albeit tumbling in the last week close to 5%, the USDJPY remains upward biased. At the time of typing, the USDJPY sits comfortably above 140.00. Nevertheless, the USDJPY could not crack the 100-day Exponential Moving Average (EMA) at 140.95, which could have exacerbated a rally toward the November 11 daily high at 142.48. It should be noted that the Relative Strength Index (RSI) exited from oversold territory, suggesting that USDJPY buyers are outpacing sellers.

On the downside, the USDJPY key support levels are the September 22 swing low at 140.34, followed by this week’s low, November 15 at 137.65. Upwards, the USDJPY key resistance levels lie at the 100-day EMA at 140.95, followed by 142.48, followed by the 50-day EMA at 145.08.

USDJPY Has Given Bears Room for Dominance Below the TL

Nov 21 2022