USD/JPY Faces the 200 SMA As It Turns Bearish Again Today on Negative Risk Sentiment
Skerdian Meta • 1 min read
USD/JPY turned bearish more than two weeks ago when it opened with a gap lower after the trade talks between US and China came to a halt after the new tariffs from both sides. The safe havens such as the JPY attract strong bids on such occasions and as a result this pair lost more than 250 pips during that week.
Last week we saw a retrace higher though, despite a deteriorating sentiment and USD/JPY pushed higher, breaking moving averages one after another. But, this pair ran into moving averages on higher time-frame charts such as the daily and the weekly charts where it found resistance.
So today, we are seeing a reversal back down. The trade war is escalating further with China and the US threatening each-other which is hurting the sentiment and increasing the demand for the JPY as a safe haven. But now, this pair is facing the 200 SMA (purple) which has been providing support all day today.
The moving averages, provided resistance on the way up and turned into support when the price retraced lower so the 200 SMA is doing the same now. This will be a sign of the trend in the coming days; if the 200 SMA breaks, then the other MAs should break as well, if it hold, then we will likely see the same price action of the last two weeks.