The price movement on the USD/JPY chart showed a decline earlier this week but analysts still saw the price moving in a bullish trend.
Volatile market sentiment over the past few weeks has affected both the safe-haven currencies of the US dollar and the Yen, however the US dollar is seen to be more dominant.
Starting trading at the beginning of the week in the Asian session yesterday, the price has shown a bullish pattern continuing the bullish trend of the past week.
Yet the upward momentum slowed in the European session and a more significant decline occurred in the New York session.
The US dollar was seen failing to maintain the strengthening momentum exhibited over the weekend following the decline in US treasury yields as well as declining US manufacturing activity data for April.
After touching the high of 109.700, the price has slipped 90 pips to the level of 108.900 and slowed until the end of the New York session.
Prices that fall below the support level of Moving Average 50 (MA50) in the 1 hour time frame of price movement will also give an early signal for a bearish trend.
But in resumed trading in the Asian session this morning, the price was seen again making a slow rise to around 109.300 towards the early opening of the European session.
Investors will examine whether the price is able to overcome yesterday’s highs before being more confident for the price to continue rising on the bullish trend.
The rally will also test the resistance at 110.00 before hitting the latest high for the 4 -week trading period.
If the US dollar continues to depreciate, the price may plunge lower with the expectation of heading back to the RBS (resistance become support) zone of 108.500-108.200.
The next lower decline will be to the support zone at 107,400 which has supported the decline in last April's trading.
