Price movements on the chart of the safe-haven currency pair USD/JPY showed a significant decline after the FOMC meeting early this morning ended the bullish pattern displayed earlier.
Contrary to investors' expectations to see a surge in prices after the Federal Reserve (Fed) met the forecast to raise interest rates, the US dollar on the other hand suffered a possible depreciation in reaction to Fed Chairman Jerome Powell's positive speech seeing the United States (US) economy not heading towards recession has eased the market's previously risky sentiment.
Thus, the price on the USD/JPY chart hovering at the height of 137.400 then plunged back below 137.00 and the decline continued in the Asian session this morning (Thursday) with maintained momentum.
Bearish indicators are more clearly evaluated by investors following the price that moves back below the Moving Average 50 (MA50) obstacle level on the 1-hour time frame on the USD/JPY chart.
The decline was close to touching the support level at 135.00 but prices started to slow above that zone in continued trading early in the European session this evening.
Although a drop in prices will be expected due to the bearish pattern exhibited, analysts do not rule out a rebound situation if the US dollar starts to strengthen again driven by the interest rate hike by the Fed.
For the expected price decline to continue, the price that falls below the support level of 135.00 will then go to the next concentration level at the target of 132.00.
Hitting that level will mark the price's latest low for a 6-week trading period.
On the other hand if the price bounces back from the 135.00 zone, the resistance zone at 137.00 will still be a focus to test.
Breaking the MA50 barrier will also signal the beginning of a bullish trend change again and the price could potentially move higher past the 137.00 zone.
The target for the next increase is to reach again the resistance level of 139.300 tested in mid-July which is the highest price record since 1998.
