• USD/JPY erased the last two days of gains due to the US Dollar weakness.
• USD/JPY Price Analysis: Bearish engulfing pattern spurred Thursday’s 140 pip fall.

The USD/JPY advancement was capped around the confluence of the 20 and 200-day Exponential Moving Averages (EMAs), forming a bearish engulfing candle pattern, opening the door for further losses. Therefore, the USD/JPY is trading at 132.90

USD/JPY Price Analysis: Technical outlook

After steadily advancing towards the weekly high of 134.50, the USD/JPY plunged beneath the 133.00 figure. Worse than estimated fundamental news caused  US Dollar weakness. Therefore, the USD/JPY edged lower, confirmed by oscillators like the Relative Strength Index (RSI) and the Rate of Change (RoC), in bearish territory and aiming lower. Additionally, the confluence of the 20 and 200-day EMAs, exacerbated the major’s drop, as it prepared to fall towards the December low of 130.56.

Therefore, the USD/JPY first support would be the December 27 daily low of 132.63. A breach of the latter will expose the December 26 swing low of 132.30, ahead of the 132.00 mark. AS an alternate scenario, if the USD/JPY climbs above 135.00, the USD/JPY's next resistance would be 136.00, ahead of the December 20 daily high of 137.47.

USD/JPY Key Technical Levels