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Feb 19 - 07:55 AM

USD/JPY - COMMENT-USD/JPY Technicals Beginning To Look Ugly

By Peter Stoneham  —  Feb 19 - 05:56 AM

The Japanese yen comes back on stream as the broader dollar rally stalls, and for USD/JPY the technical picture is showing a marked deterioration.
It's Only a three-day pullback against the short-term 103.33 to 106.22 (EBS data) bull trend, but the damage is severe.

Big support points at 105.76, Feb.
5 high, and 105.52, 200-day moving average, give way and open up retracement levels.

A minimum Fibonacci correction point at 105.53 was breached, opening up moves to key 38.2% and 50% retracements of the 103.33-106.22 trend at 105.12 and 104.77.

A bearish influence from a March 4 Ichimoku cloud twist at 103.67-71 is also in the reversal equation.
Cloud twists can sometimes attract the market and provide a direction call.

Weekly chart is still positive, but a price rejection at the 55-week moving average, 106.22, and just ahead of the Ichimoku cloud base at 106.30 sets up a soft start to the new week.

Monthly action remains constructive, but a lengthening long upper candle shadow warns bulls that demand is fading.

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USD/JPY daily candle chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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