USD/JPY likely to reverse after recent rebound
USD/JPY looks likely to reverse lower despite seeing a strong rise in early trade.
USD/JPY support could fade despite todays rise
The USD/JPY positivity seen over the back-end of September has started to wane, with Friday seeing sharp downside after Donald Trump contracted Covid-19. Looking at things from a wider perspective, the downtrend we have seen over the course of the year looks likely to come back into play once more before long. A rise through the 106.55 resistance level would negate that trend, but until that happens, it looks likely we will see this current rise falter once more. With a confluence of trendline and 61.8% Fib resistance coming into play here, traders should keep a close eye on this pair.
From an intraday perspective, we have seen the pair claw its way back into the 200-SMA (4hr) today. With that wider bearish trend in play, and Friday price action having broken the recent short-term rally, there is a good chance this recent rise will be brief in nature. As such, a bearish outlook is in play here, with a break through the 105.80 swing-high required to bring an end to this current bearish short-term outlook.
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