USD/JPY approaches support zone

Source: Dukascopy Bank SA
On Thursday morning, the USD/JPY consolidated its decline by retracing to the 129.00 mark and the 50 and 100-hour simple moving averages. However, even before reaching the resistance levels, a decline started. By the middle of the day's European trading hours, the decline had reached the May low level zone at 127.50/127.75.

Economic Calendar



This week, notable events are over. Next week's review is scheduled to be published on Monday.

Hourly Chart
A move below the support zone of the May low levels could look for support in the weekly S1 simple moving average at 127.35. Further below, take into account the 127.00 level, which acted as support during late April.

Meanwhile, a potential recovery of the US Dollar against the Japanese Yen is expected to face resistance at 128.00, 128.50 and the 129.00 level. In addition, the 50 and 100-hour simple moving averages are likely to act as additional resistance.

USD/JPY daily chart's review

On the daily candle chart, the pair has clearly broken the channel up pattern, which guided the rate's surge from the low level of March 30.

On May 16, Dukascopy Analytics marked the April and May high level zone as resistance and late April and recent May low levels as support. Namely, resistance is located at 131.20/131.40 and support is at 126.90/127.55.

Daily chart




Sentiment remains unchanged

Since Monday, on the Swiss Foreign Exchange, traders were 63% short as that amount of open position volume was in short positions.

Meanwhile, trader set up pending orders in the 100-pip range around the rate were 62-65% to sell the USD against the JPY.

On Thursday, as 64% of volume was short and pending orders were 65% to sell.

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