The USDJPY pair is presently exhibiting signs of a temporary halt in its bullish momentum, manifesting as a triple top pattern on the monthly chart, with critical peaks identified in October 2022, October 2023, and November 2023. The commencement of a bearish push in November 2023 coincides with a noteworthy divergence in the Relative Strength Index (RSI) between these pivotal points. An expected retracement of approximately 1200 pips down to the swing low in July 2023 is on the horizon, underlined by the downward slope of RSI, currently situated below the 70 line at 67, and the appearance of smaller green bars on the MACD. Further confirming this bearish sentiment, the weekly chart illustrates the triple top pattern with RSI trending downward and the emergence of the first red bar on the MACD. The previous week's bearish closure, breaking below the preceding nine weeks, signifies a notable shift in market sentiment.
Zooming into the daily chart, a distinctive bearish market flow is observable, with RSI positioned below the midline at 45.63, and the MACD printing red bars, positioned just below its midline at -0.193. Price action is currently consolidating between the 20-day EMA and above the 50-day EMA, underscoring the potential for sustained downward movement.
Considering the broader bearish trend observed in the Dollar Index (DXY), it is anticipated that the USDJPY pair will adhere to a corresponding bearish trajectory. The next anticipated move involves a sell-side liquidity sweep at the swing low established in September 2023 at 144.440. A decisive breach below this level may catalyze a more extensive decline, with a potential target being the 200-day EMA, presently situated at 143.487. On the contrary, a break above and sustained hold beyond the 20-day EMA, currently at 149.919, could signal a potential resurgence in bullish momentum, potentially propelling the pair back towards its one-year high of 151.911. As with any technical analysis, it's imperative to remain cognizant of external factors that may influence market dynamics and to implement effective risk management strategies when executing trades based on such analyses.
Zooming into the daily chart, a distinctive bearish market flow is observable, with RSI positioned below the midline at 45.63, and the MACD printing red bars, positioned just below its midline at -0.193. Price action is currently consolidating between the 20-day EMA and above the 50-day EMA, underscoring the potential for sustained downward movement.
Considering the broader bearish trend observed in the Dollar Index (DXY), it is anticipated that the USDJPY pair will adhere to a corresponding bearish trajectory. The next anticipated move involves a sell-side liquidity sweep at the swing low established in September 2023 at 144.440. A decisive breach below this level may catalyze a more extensive decline, with a potential target being the 200-day EMA, presently situated at 143.487. On the contrary, a break above and sustained hold beyond the 20-day EMA, currently at 149.919, could signal a potential resurgence in bullish momentum, potentially propelling the pair back towards its one-year high of 151.911. As with any technical analysis, it's imperative to remain cognizant of external factors that may influence market dynamics and to implement effective risk management strategies when executing trades based on such analyses.