August 3, 2022 12:01 AM ET
By: AnalysisWatch
The USD/JPY is consolidating the biggest daily gains in six weeks at around 133.00 in the Asian trading session on Wednesday, with the yen pair bouncing off the 100-day EMA and reversing from the 50-day EMA.
Considering the bearish MACD signals and the fact that the US dollar is not trending firmer, it is likely that the USD/JPY price will continue the recent pullback moves.
However, the 61.8% Fibonacci retracement of the May-July uptrend at 131.30 may attract short-term sellers.
However, a clear downside break of the 100-day EMA, which was around 130.40 at press time, is needed to convince the USD/JPY bears. Even then, the 130.00 level could provide a test for the southern run.
Alternatively, a recovery move will require a daily close above the 50-day EMA at 134.00 to attack the 38.2% Fibonacci retracement resistance at 134.40.
Following that, a downward resistance line from mid-July at 136.10 will be important as it is the key to USD/JPY's recovery towards the yearly high at 139.40. In the process, the psychological mark of 140.00 will be on the bulls' rada
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