USD/JPY extends selling interest; indicators signal further weakness.
USD/JPY continues the selling interest underneath the 104.00 psychological level and the 23.6% Fibonacci retracement level of the bearish move from 112.20 to 101.15. The RSI indicator is pointing down again and the MACD oscillator is extending its bearish momentum well below its trigger and zero lines, suggesting a sharper bearish structure.
The selling pressure could accelerate again if the market deteriorates below the 23.6% Fibo of 103.75, edging towards the 41-month low of 101.15. Such a move could next bring the 100.00 key level under the spotlight, taken from the low on September 2016, which if violated could trigger sharper losses probably towards the 99.50 and 99.00 key levels, from August 2018 and June 2018 respectively.
Traders, however, would be eager to engage in buying activities if the price manages to surpass the 38.2% Fibonacci of 105.37 and 105.70. If these are successfully breached, then the rally may next rest somewhere between the 106.50 level and the 50.0% Fibo of 106.67, while if there is a closure above may test the 61.8% Fibo of 107.95, which overlaps with the 20-day SMA.
To sum up, in the medium-term, a stronger push below the 41-month low is required to upgrade the negative outlook.
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