USD/JPY bulls have once again failed to move beyond the 106.44 resistance area and the pair is currently trading 0.33% lower to 106.03. A breach below 106.00 is likely to further extend the downwards move and the bears would find support only near 105.77 and 105.52 areas. The 106.40 is major a resistance for bulls while other resistances are at 106.64 and 106.86.

Currently, it appears that the downwards move is extending towards the SMA-14 support line at 105.41. The SMA-50 support area is at 104.30. The pair is above the mid-Bollinger band which is at 105.33. The RSI is at 61 and has a downwards curve. Based on the price pattern the pair would be good to sell if it breaks below 106.00 on the 4-hourly scale. A reasonable target would be 105.45 with a stop-loss at or above 106.30. On the flip side, the 105.40 may act as a strong support line and a buying entry can be planned near that level. The target would be 105.90 with a stop-loss at 105.15.

On the upside, only a sustained price action above 106.00 will be supportive of the bulls and help them challenge the resistance at 106.44.  On the downside, a weekly closing below 105.40 would be a setback to the bulls and the downside would likely be extended during the next week.


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By LCMS Traders FX Analysis Team

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