USD/JPY Price Analysis: Plummets Below Ichimoku-Cloud, Eyes Further Downside

By Christian Borjon Valencia of FX Street

Editor • Jul 23, 2024 at 7:40 PM EDT

The USD/JPY plummets over 0.85% and drops below the Ichimoku Cloud (Kumo) for the first time since January 15.

Yen, Money, Wealth, Japanese Yen

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USD/JPY drops below Ichimoku Cloud, first since January 15, hinting at possible extended downtrend.
Bearish RSI suggests further falls; supports at 155.00, 154.55, 151.86.
Resistance at 156.33; breach may push to 157.00, potentially reversing trend.

The USD/JPY plummets over 0.85% and drops below the Ichimoku Cloud (Kumo) for the first time since January 15. This is an important milestone yet pending to be confirmed by a daily close below 155.90. At the time of writing, the pair trades at 155.65 after hitting a daily high of 157.10.

USD/JPY Price Analysis: Technical outlook

The USD/JPY is set to extend its losses if it achieves a daily close below the Kumo. This would be the fifth technical signal using Ichimoku to confirm the downtrend, which could pave the way for a deeper pullback.

Momentum favors sellers as depicted by the Relative Strength Index (RSI) aiming lower beneath the 50-neutral line.

Therefore, the USD/JPY path of least resistance is tilted to the downside. the first support would be the 155.00 figure. A breach of the latter will expose the June 4 low of 154.55, followed by the May 3 bottom at 151.86. Further losses are seen under that level, like the March 8 low at 146.48.

On the other hand, if buyers lift the exchange rate past the top of the Kumo at 156.33, that can open the door for a leg-up. The next resistance would be 157.00.

USD/JPY Price Action – Daily Chart

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