FXStreet (Guatemala) - Valeria Bednarik, chief analyst at FXStreet explained that the USD/JPY pair fell down to 118.05, extending its decline for a third day in a row, on technical selling and despite the strong upward momentum in Asian and European stocks.
Key Quotes:
"The pair has been trading in quite a limited range since late August, with buying interest surging on dips towards the 119.00 level. But the pair broke below this last late Thursday on risk aversion, spooking buyers and leading to a continued decline. Better-than-expected US data however, interrupted the bearish rally of the pair, leading to an intraday recovery up to the current 118.70 price zone. Short term, the 1 hour chart suggest the ongoing recovery may extend, given that the technical indicators continue heading higher from oversold levels, but the upside seems limited, as the mentioned indicators remain well below their mid-lines, whilst the moving averages have turned lower well above the current level."
"In the 4 hours chart, the technical indicators are also aiming higher from extreme oversold levels, but remain well below their mid-lines. Above 119.00, the pair can extend up to 119.35, but if selling interest surges around this last, the risk will turn back lower, looking then for a retest of the 118.00/10 price zone."
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