USD/JPY Freefall: 1.13% Drop Signals Deeper Downtrend

The USD/JPY currency pair experienced a significant drop, falling 1.13% to 152.59. This sharp decline occurred as the pair decisively broke through both the 200-day Simple Moving Average (SMA) and the Ichimoku Cloud (Kumo), signaling a strengthening downtrend and potential appreciation of the Japanese Yen.

The 175-pip drop on Wednesday confirms the bearish momentum. While the pair currently trades at 152.59, a potential recovery could occur if buyers manage to push the price above the 153.00 level. This could lead to a test of the Kumo’s lower edge around 153.35/40, which might present an attractive selling opportunity. A break above this resistance could then target 154.00, followed by the February 5th high at 154.46.

However, if the downtrend continues, the USD/JPY could target longer-term support levels, such as the December lows of 149.36 and 148.65. The break below the Kumo and the 200-day SMA has solidified the bearish outlook, suggesting further downside potential for the pair.