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USD/JPY bounces off weekly low to pare intraday losses, portrays two-day downtrend.
Convergence of 200-EMA, short-term support lines highlights 133.90 as the key support.
Yen pair’s recovery remains elusive below 135.40 hurdle.
USD/JPY picks up bids to recover from the intraday low, as well as the weekly bottom, as markets remain in consolidation mode during early Thursday. Even so, the Yen pair remains mildly offered near 134.20, printing a two-day losing streak by the press time.
That said, the quote’s failure to cross an 11-week-old horizontal resistance area joined downbeat US inflation numbers to trigger the USD/JPY pair’s U-turn from the weekly high on Wednesday.
The following losses, however, failed to conquer a convergence of the 200-day Exponential Moving Average (EMA), a two-week-old ascending trend line and an upward-sloping support line from March 24, close to 133.90.
It should be noted that the MACD indicator flashes bearish signals and hence the USD/JPY rebound appears elusive, which in turn requires the bulls to cross the aforementioned horizontal resistance area surrounding 135.30-40 to retake control.
Following that, a run-up towards 136.50-60 and the 137.00 round figure can be witnessed on the USD/JPY chart before finding the buyer’s struggle to overcome the double tops around 137.80-90.
On the flip side, a daily closing below 133.90 may quickly drag the Yen pair to a 133.00 round figure before directing it to April’s low of around 130.63.
In a case where the USD/JPY bears remain dominant past 130.63, the 130.00 round figure and March’s bottom of near 129.65 should pop on their radar.
Trend: Limited upside expected
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