USD/JPY Price Analysis: Plummets towards the 20-DMA, after Japanese authorities’ intervention

• The Japanese Yen gained traction, as shown by the USD/JPY sliding 1% toward 131.10s.
• USD/JPY Price Analysis: On a pullback in the near-term, as bull’s eye, the 20-DMA

The USDJPY erased Monday’s gains and collapsed to the 131.00 area after hitting a week-high of 132.90. Intervention by Japanese authorities weakened the US Dollar (USD), giving way to a 140 pip drop. At the time of writing, the USD/JPY exchanges hand at 131.21, below its opening price by 1.08%.

USD/JPY Price Analysis: Technical outlook

From a daily chart perspective, the USD/JPY remains upward biased, even though it failed to crack Monday’s daily high and tumbled beneath the 20-day Exponential Moving Average (EMA) at 130.58. However, bulls stepped in around the latter, and the USD/JPY reclaimed the 131.00 figure, which could exacerbate a re-test of 132.00. Then, the USD/JPY next resistance would be the 50-day EMA at 132.84, ahead of the  200-day EMA at 133.85.

As an alternate scenario, the USD/JPY first support would be the 131.00 figure. Once broken, the 20-day EMA at 130.58 would be the following line of defense for USD/JPY bulls, followed by a move lower to the 130.00 psychological level.

Indicators portrayed a sideways scenario, with the Relative Strength Index (RSI), although remaining upward biased, about to turn bearish. Contrarily, the Rate of Change (RoC) suggests that buyers remain in control, albeit being outpaced by sellers on Monday.

USD/JPY Key Technical Levels