USD/JPY Bears Take Control as Support is Breached

After failing to maintain stability above the 145.00 support level, USD/JPY has embarked on a major decline. The 4-hour chart reveals that the pair has broken below the 143.20 support zone, indicating a shift into a bearish zone. Furthermore, USD/JPY has dropped below the 142.50 level, as well as the 100 and 200 simple moving averages. The pair even dipped below the 141.20 level, with a low point reached at 140.24 before starting to consolidate its losses.

As USD/JPY attempts to recover, it faces immediate resistance at the 141.50 level. A further challenge lies at the first major resistance near 142.00. Additionally, a significant bearish trend line is forming with resistance around 142.10. A breakthrough above this trend line could drive the pair higher towards 142.60. The next key resistance level to watch is around 143.20. If USD/JPY successfully closes above this level, it could pave the way for further upsides towards the 144.00 level. Additionally, continued gains may lead to a drift towards the critical 145.00 level.

However, should USD/JPY experience more downsides, it may drop below the 140.25 level. This would expose the pair to the next significant support level at 140.00, potentially leading to a decline and a test of the 139.20 level. If bears maintain control, the pair could further descend towards the 138.50 support.

EUR/USD Shows Bullish Momentum

In contrast to USD/JPY, EUR/USD has demonstrated bullish momentum, surpassing both the 1.1040 and 1.1080 resistance levels. However, this upward trend was short-lived as bears stepped in before the pair could climb higher.

In terms of economic releases, market participants are eagerly awaiting the Chicago Purchasing Manager’s Index for December 2023. The forecast stands at 51.0, compared to the previous reading of 55.8.

USD/JPY has experienced a significant decline as it broke below key support levels. Although there are possibilities for a recovery, with resistance levels to watch, bears continue to dominate the market. On the other hand, EUR/USD briefly displayed bullish momentum before encountering resistance. Traders will closely monitor the upcoming economic release of the Chicago Purchasing Manager’s Index to gain insights into market trends and potential opportunities.