Since 9 March 2020, the USDJPY currency pair on the Daily Chart has been following an upward course, having found support at level 101.178.
The creation of the reversal trend, Bullish Engulfing in Japanese candlesticks, indicated the very beginning of the upward bias.
The low prices attracted buyers with long positions into the market, driving USDJPY to higher rates as a result.
The currency pair subsequently developed an Evening Star pattern close to the 111.711 resistance point. This suggests a fall at the end of the rally and a possible decline start.
Upon applying technical analysis to the price chart, the Japanese candlestick could close below the 10-period Exponential Moving Average line after the Evening Star pattern.
This also points to the downward trend on the market and to the bearish bias.
Additionally, the Relative Strength Index Oscillator records values below the fifty row, reinforcing the negative market sentiment.
Both technical measures and the reversal pattern of the Japanese candlestick agree about the downward tendency of the pair.
Besides, the current price is trading below the trend line that is upwards, which also implies that supply is greater than demand.
Three price targets were calculated by applying the Fibonacci Retracement tool to the low price of the Bearish Japanese candlestick at the price of 109.204 and dragging it up to the high price of the pattern at the price of 111.711:
- First demand point is 106,697 (200 percent).
- The second goal for prices is 104.19 (300 percent).
- The third goal price is expected to be 101,683 (400 percent).
If the crowd psychology and the pressure from the sellers would be able to retain market dominance and drive the currency pair of USDJPY down.
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