- USD/JPY bullishness lacks follow-through, despite stronger US dollar
- Near-term gains capped at immediate resistance levels
- Daily RSI continues in bearish territory ahead of US ISM data
USD/JPY faded off from the 106.45 territory in two good volatile sessions earlier and is now consolidating below 106.00.
The pair is in a near-term bearish technical outlook as the price ranges within a month-long falling channel; the downward-sloping 21-day simple-moving-average caps the upside at 106.58.
A better than expected US ISM Manufacturing PMI might help in a close above the next resistance of 106.85, which will confirm the falling channel pattern. It will then put the bearish 50-DMA of 107.17 as the immediate target.
If the market fails to move up, the intraday low at 105.72 will offer support; if not, the 105.5 psychological barriers could be under attack.
The daily Relative Strength Index, RSI, reading has turned below 50 suggesting more bearishness in the coming days.
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