USDJPY has hit new lows at a crucial support level.
The USDJPY continues to fall, reaching a low of 140.36 on Friday, about equal to the critical December 2023 low, where it is likely to find strong support.
USDJPY Technical Outlook
On September 11, the pair broke below its August 5 low, crossing a crucial milestone. Taken along with the break below the main multi-year trendline at the beginning of August, this shows that the long-term uptrend may have reversed. Furthermore as a technical analysis principle, “the trend is “Your friend.” Such a reversal implies that the broad bias has switched from “bullish” to “bearish”.
If USDJPY can close below the December 2023 low of 140.25, it will provide more confirmation of a long-term trend reversal. Following such a break, pricing might fall to the next target at 137.24 (the low from July 2023). It is worth noting that the short and medium term trends are already gloomy.
Moreover USDJPY is exhibiting slight bullish convergence between price and Relative Strength Index (RSI). The RSI was in the oversold zone at the September 11 low; however, despite the fact that the price has fallen even further, the RSI has not.
This could be an indication that the trend down lacks some negative conviction and indicates There is a chance of a pullback occurring. Given the other bearish indicators on the chart, any rebound is likely to be short before the bear trend resumes and the pair falls to new lows.
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