Technical Analysis – USDJPY retreats after hitting 2-month high
USDJPY eases near 161.8% Fibonacci extension
RSI and stochastic look overbought
The price is currently testing the 161.8% Fibonacci extension level of the down leg from 151.95 to 140.20 at 159.13, with the next support coming from the 157.70 level and the long-term uptrend line at 156.70. A drop beneath the diagonal would open the way for a downside correction towards the 23.6% Fibonacci retracement level of the upward wave from 140.20 to 160.20 at 155.50.
The technical oscillators indicate an overstretched market. The RSI is flattening slightly beneath the 70 level, while the stochastics posted a bearish cross within the %K and %D lines.
In the positive scenario, a successful climb beyond the 34-year high of 160.20 could take the market towards the next round numbers such as 161.00 and 162.00 until the resistance line of 164.50, taken from the high in November 1986.
To sum up, USDJPY is strongly positive unless there is plunge beneath the 200-day SMA at 150.50.Related Assets
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