USD/JPY Forecast: Bearish Pressure Mounts On Risk Aversion

Bearish pressure mounts on risk aversion. The Japanese yen rallied against the greenback in a risk-averse environment, leading the USD/JPY pair to post a fresh 6-week low of 113.61  during the London morning, although buying interest sub-114.00 quickly sent the pair back above the mentioned level.

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The negative tone in European equities, however, helps the yen to hold on to gains daily basis, with the pair at risk of falling further. Short term, the 1-hour chart shows that the 100 and 200 SMAs maintain their sharp bearish slopes well above the current level, whilst technical indicators hold within negative territory, with no certain directional strength. Additionally, the pair is now trading below the 23.6% retracement of the latest weekly bullish run at 114.50, the immediate resistance and the level to surpass to see the bearish pressure easing.

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In the 4 hours chart, technical readings also support further slides, as the 100 SMA accelerated its decline far above the current level, aiming to cross towards the downside the 200 SMA, while indicators remain flat within negative territory, amid limited volumes today.

Support levels: 114.00 113.65 113.20

Resistance levels: 114.50 114.85 115.20

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