USDJPY bears are building momentum

The USDJPY currency pair on the H4  time frame had upward momentum until a last higher top formed at 134.768 on 6 January, close to a weekly resistance level. Sellers then started overcoming buyers with the resulting change in market momentum and structure.  

After the higher top at 134.768, the price broke through the 15 and 34 Simple Moving Averages and the Momentum Oscillator sliced through the 100 baseline into bearish terrain.

A possible critical support level formed when a lower bottom was recorded on 9 January at 131.296. The bulls then proceeded to drive the price upwards until it encountered a resistance level around 132.866 on 11 January. The bears started building momentum again from there. 

On 12 January the price of USDJPY broke through the critical support level at 131.296 and three possible price targets can be reached from there. Attaching the Fibonacci tool to the lower bottom at 131.296 and dragging it to the resistance level at 132.866, the following targets were calculated. The first target is estimated at 130.326 (161.8%). The second price target may be expected at 128.756 (261.8%) and the price will have to reach a weekly support level to trigger that. The third and final target may be estimated at 126.215 (423.6%), which is well situated just off the next weekly support level.

If the resistance level at 132.688 is broken, risk management is paramount as the market structure will not be bearish anymore.

As long as the bearish momentum keeps building, the outlook for the USDJPY currency pair will remain bearish.