USD/JPY Price Analysis: Stumbles to fresh weekly lows around 132.10s

• USD/JPY drops 0.70% on risk aversion and a softer US Dollar.
• USD/JPY Price Analysis: Downward biased, could extend its losses below 130.00, towards May lows around 126.00.

The USD/JPY is falling for the second consecutive day as risk aversion continues to drive the last trading day of 2022, as shown by Wall Street registering losses. The USD/JPY extended its fall below the December 29 daily low of 132.87 and stabilized at current exchange rates after hitting a daily low of 131.50. At the time of typing, the USD/JPY is trading at 132.11.

USD/JPY Price Analysis: Technical outlook

From a daily chart perspective, the USD/JPY might continue to drop further, but until it breaks the December 20 daily low of 130.56, that could pave the way to test 130.00. At the time of writing, the 20-day Exponential Moving Average (EMA) crossed below the 200-day EMA, exacerbating further downside action. Since peaking at around 151.94 in October, the USD/JPY has recorded successive series of lower highs and lows, confirming the downtrend. Additionally, the Relative Strength Index (RSI) and the Rate of Change (RoC) are in bearish territory, suggesting that sellers are in charge.

That said, the USD/JPY first support would be 130.56, followed by the figure at 130.00. The break below will expose the May 24 swing low of 126.36, followed by the March 31 low of 121.27.

USD/JPY Key Technical Levels

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• Source: https://www.fxstreet.com/news/usd-jpy-price-analysis-stumbles-to-fresh-weekly-lows-around-13210s-202212301556