- USD/JPY snaps four-day uptrend after ex-Japanese Prime Minister Shinzo Abe shot.
- Clear break of immediate triangle, 200-HMA directs bears towards weekly support line.
- Buyers need validation from 136.40 to retake control.
USD/JPY dropped nearly 70 pips on news of the shooting on ex-Japanese Prime Minister Abe, before bouncing off 135.33, during early Friday morning in Europe.
Also read: USD/JPY: Yen catches a fresh bid as ex-Japan PM Abe shot
The news also pushed the yen pair below the 200-HMA, as well as broke the three-day-old ascending triangle to portray the risk-off mood due to the local news.
It’s worth noting that the bearish MACD signals and a dip in the RSI (14), not oversold, also join the latest breakdown of the key technical levels, which in turn favor USD/JPY sellers.
However, the 61.8% Fibonacci retracement of June 23-29 upside, around 135.30, precedes the weekly support line near 135.00 to restrict the short-term USD/JPY downside.
Following that, 134.25-20 may offer an intermediate halt during the slump targeting a mid-June swing low of 131.50.
Meanwhile, the 200-HMA level of 135.80 and the support line of the triangle, at 136.00, guard immediate recovery moves.
In a case where the USD/JPY remains firmer past 136.00, the buyers could again aim for the 23.6% Fibonacci retracement level surrounding 136.35-40.
USD/JPY: Hourly chart
Trend: Further weakness expected