- USDJPY bears are licking their lips within the coil.
- Bulls need to move in and take out horizontal resistance or face a downside breakout.
USDJPY stays relatively flat for Thursday following a consolidative day on Wednesday where the price traveled between a high of 140.29 and a low of 138.72, now trading back at 139.50.
The US Dollar has been under pressure, however, falling from elevated levels on the sentiment that the Federal Reserve will be forced to pause its rate hikes. As interest rate differentials with other countries narrow, the US Dollar would be expected to continue to slide. The sentiment is fueling the downside potential for USDJPY as the following technical analysis will illustrate:
USDJPY daily chart
USDJPY is meeting fresh dynamic support and is coiled into a bearish continuation triangle on the daily chart. Being on the back side of the prior trendlines is bearish.
USDJPY H1 chart
The bulls need to get above horizontal resistances while the bears are seeking a break of support outside of the coil.
USDJPY M15 chart
The 16-min charts show the price sticking to a tight consolidation which potential means a breakout is imminent.