USD/JPY reverses lower after touching 114; outlook remains bullish.
USD/JPY has been facing selling interest since yesterday, diving slightly below the 20-day simple moving average (SMA) after it reached again the 114.00 psychological level. The pair still remains above the long-term ascending trend line, however, the technical indicators turned lower. The RSI is pointing south in bullish zone, while the blue %K line of the stochastic oscillator posted a bearish crossover with the red %D line.
Should negative momentum continue and the price slides below the rising trend line as well as below the 23.6% Fibonacci retracement level of the up-leg from 104.60 to 114.55, around 112.30, the bears could retest the 111.40 support level, taken from the low on October 26. Moving lower, the 38.2% Fibonacci of 110.75 could be a stop for the bears before slipping until the 110.35 area.
On the upside, resistance could occur around 114.20, taken from the highs on November 12. In case of a break above this hurdle, the 11-month high of 114.55 could be the next level for investors to look for. If this is also broken, resistance could run towards the 115.50 high, reached on March 2017.
In the longer-term view, USD/JPY retains a bullish outlook over the last eight months. A daily close below the ascending trend line could signal a shift of the outlook to a more neutral one.
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