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

By Christian Borjon Valencia of FX Street

Tuesday, July 23, 2024 7:40 PM EDT

Yen, Money, Wealth, Japanese Yen

Image Source: Pixabay

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

More By This Author:

Gold Price Falls Below Key Support As US Yields Climb
Silver Price Analysis: XAG/USD Plummeted More Than 2% And Dropped Below $29.50
Gold Price Stumbles Beneath $2,400 Drops To Five-Day Low

Disclaimer: Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only ...

Disclaimer: Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

less

How did you like this article? Let us know so we can better customize your reading experience.