USDJPY Price Analysis: Plummets below the 100-DMA and hits a fresh 2-month low

• The USDJPY is set to finish the week with losses of more than 5%.
• From a daily chart perspective, the USDJPY is neutral-to-downward biased if the major stays below the 100-day EMA.

The USDJPY extended its free fall and plummeted another 200 plus pips on Friday, below the 100-day Exponential Moving Average (EMA) at 140.76. Speculations that the Federal Reserve might slow the pace of rate hikes and US Treasury yields falling are the two main factors weighing on the US Dollar (USD). Therefore, the USDJPY is trading at 138.54, below its opening price by 1.73%.

USDJPY Price Analysis: Technical outlook

The USDJPY portrays that Thursday’s price action broke a one-month-old upslope support trendline, exacerbating a fall toward the 100-day EMA at 140.74. On Friday, the USDJPY hit a daily high at around 142.50 before diving sharply, as buyers failed to clear the September 22 swing low at 140.34, which shifted the pair’s bias from neutral to neutral downwards. The Relative Strength Index (RSI) tumbled toward the bearish territory, entering oversold conditions.

Even though the USDJPY cleared key support levels, a break of the 200-day EMA is needed so that Japanese Yen (JPY) buyers could be in charge. Otherwise, the USDJPY might be subject to buying pressure.

Therefore, the USDJPY first support would be the 138.00 figure. Break below will expose the 137.50 psychological level, followed buy a six-month-old upslope trendline that passes around 136.50, ahead of the 136.00 mark.

On the flip side, the USDJPY's first resistance would be the July 14 daily high at 139.38, followed by the psychological 140.00, ahead of the 100-day EMA.

USDJPY Key Technical Levels