USD/JPY: Bid but Headed Back Towards 200 Week SMA?

USD/JPY: Bid but Headed Back Towards 200 Week SMA?

USD/JPY has rallied in the opening hour of Tokyo; however, we are in highly bearish territory and if the bulls cannot find traction back to the 110 handle with conviction, the bulls could find themselves way out of the bigger picture.

USD/JPY out of the bigger picture? - TDS

USD/JPY is under heavy pressure due to the severe risk-off mood in the marketplace. Analysts at TD Securities are short of the major and said, "We shift to our stretch target of 105. Ahead of this, we see significant support at 106.57 and around the 105.20/50 zone, which could see us take profit a little before reaching this goal."

Contrary to the major bearish implications for USD/JPY, Yellen was sounding less dovish earlier and headlines can be viewed here.

USD/JPY levels

USD/JPY has now broken the base of the short-term channel and the 2015-2016 channel. This is a bearish scenario that brings 106.63/38.2% retracement of the move up from 2012 into scope. "In this vicinity we also find the 200 month ma at 105.87 and we suspect that the market will attempt to stabilise here," explained Karen Jones, chief analyst at Commerzbank.

(Market News Provided by FXstreet)