USD/JPY Breaks EMA Band as Yen Strength Charts Signal Downside

The USD/JPY pair has been trending upwards since May of this year, but recent developments suggest that it may be poised to reverse course. The US Treasury and BOJ have collaborated to calm the yen's rally, and the weekly chart shows a break below the 20-week EMA ±1 standard-deviation band.

This is a bearish signal, as price has changed its behavior by losing the lower edge of an EMA band it was previously trending on. A retest of the 20W EMA last week resulted in a clear shooting star rejection candle, further supporting the idea that USD/JPY could be headed for downside.

The yen strength charts also show confluential signals: JXY is at support at the 20W-EMA and rising channel's low, while DXY is at resistance at the 100.82-101.92 zone.