USD/JPY Price Analysis: Yen bulls are firmer below 200-EMA, 127.00 eyed

• A firmer plunge below the 200-EMA has advocated yen bulls' domination.
• The asset is testing the supply zone placed in a narrow range of 129.32-129.46.
• Momentum oscillator RSI (14) has shifted into a bearish range of 20.00-40.00.

The USD/JPY pair has witnessed a steep fall after the downside break of the consolidation placed in a narrow range of 129.70-130.48 on Wednesday. The Japanese yen took control after the major printed a multi-year high of 131.25 last week.

A usual test of the supply zone placed in a narrow range of 129.32-129.46 is displaying an optimal opportunity to create short buildups for the market participants. The asset has slipped below the 200-period Exponential Moving Average (EMA) at 129.30, which adds to the downside filters.

The Relative Strength Index (RSI) (14) has shifted into a bearish range of 20.00-40.00, which indicates a fresh leg of weakness in the counter.

A bear cross of 20- and 200-period (EMAs) looks certain, which will infuse an adrenaline rush into the yen bulls.

For an ideal short build-up, investors should use the pullback towards the 20-EMA at 129.46 as a selling opportunity. This will drag the asset towards Wednesday’s low and the round level support at 128.46 and 127.00 respectively.

On the flip side, greenback bulls may dominate the asset if it oversteps Monday’s high at 130.48. This may push the asset to reclaim its recent multi-year high at 131.25, followed by the round level resistance at 132.00.

USD/JPY hourly chart