August 30, 2022 12:50 AM ET
By: AnalysisWatch
Early Tuesday morning in Europe, the USD/JPY pair took bids to renew its intraday low around 138.40. As a result, the yen pair suffered its first daily loss in three days, reversing from the one-and-a-half month high reached the day before.
That said, the latest pullback in trading may be related to the failure to break through an ascending resistance line dating back to August 5. The nearly overbought RSI (14) also highlights the chances of a pullback.
While the latest pullback moves are likely to direct USD/JPY bears toward 138.00, further weakness in the pair looks difficult as the confluence of the 10-DMA and a short-term support line challenges the bears near the 137.00 round figure.
It should be noted, however, that the bearish ascending bevel chart pattern around the multi-day high could gain strength if USD/JPY breaks the 137.00 support.
Then, the 61.8% Fibonacci retracement level of the May-July rise and the monthly low near 131.30 and 130.40, respectively, could entertain traders at the theoretical target surrounding the 130.00 psychological magnet.
Meanwhile, recovery moves could aim to challenge the bevel formation by breaking through the 139.00 resistance.
Even so, the latest multi-month high near 139.40 and the 140.00 threshold could join the overbought RSI in probing the USD/JPY bulls.
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