USD/JPY moved to a recent lower high of 115.68 is indicative of momentum loss. Technical indicators flag the chances of another leg lower if intermediate support in the 114.02-113.67 is tested and cracks, Benjamin Wong, Strategist at DBS Bank, reports.
Momentum loss hints a leg lower
“The MACD (moving average convergence/divergence) shows bearish divergence, and the Spearman Indicator indicates a weakened USD. A prolonged loss under the cloud support at 114.02 places the 100-day moving average (DMA) of 113.67 for a potential test.”
“USD is coming to grips with a long-term resistance line that spans all the way back to April 1990’s 160.20 peak. This means the current resistance tagged to this line around 116.77 remains formidable and do require tailwinds of strength to break above it.”
“On the downside, 111.67 is the key level to monitor given it is the convergence of two key moving average levels.”