Original article source: ActionForex.com
Original author: ActionForex Team
URL: https://www.actionforex.com/technical-outlook/usdjpy-outlook/629599-usd-jpy-weekly-outlook-444/
USD/JPY Weekly Outlook – Analysis and Forecast
By ActionForex Team
The USD/JPY currency pair posted moderate gains over the past week, settling near 157.00 by the week’s end. Price action was largely range-bound, with bulls maintaining control of the longer-term trend. While underlying momentum has weakened over recent sessions, overall bullish structure remains intact. A deeper analysis reveals important implications for both short-term moves and long-term positioning in the pair.
Weekly Price Behavior Analysis
– USD/JPY traded within a relatively narrow range for the week, exhibiting limited directional strength.
– The pair opened the week close to the psychological support of 156 and closed near 157.
– Price remains well above the 55-day EMA and shows resilience even in the face of mixed US data sets and ongoing intervention threats from Japanese monetary authorities.
– Technical structure remains in favor of buyers, although some signs of loss in upward momentum require monitoring.
Momentum Analysis and Technical Outlook
Despite persistent bullish posture, the pair is showing early signs of a potential correction. These signals mainly come from oscillators and other technical metrics hinting at waning buying enthusiasm.
– Daily MACD (Moving Average Convergence Divergence) indicators show narrowing histograms, suggesting that bullish momentum is softening.
– RSI (Relative Strength Index) is holding just beneath overbought territory, signaling limited room for further upside before consolidation or pullback could occur.
– USD/JPY has consistently printed higher lows and higher highs since early 2024, confirming an intact uptrend.
– Immediate resistance remains at 157.70 (recent high), and a sustained break above this level is needed to validate further bullish continuation.
– On the downside, initial support lies at 154.54, which was a previous consolidation base.
– Key support levels to watch include:
– 152.84 (minor support)
– 150.87 (medium-term pivot zone)
– 146.47 (longer-term support, neckline from double bottom pattern)
Weekly MACD indicators remain in positive territory, aligning with bull trend continuation. Weekly RSI is neutral-to-positive, supportive of continued strength as long as prices hold above 150 in the medium term.
Short-Term Forecast and Risk Factors
Although positioned for further gains, the USD/JPY pair is sensitive to various geopolitical and policy risks that can trigger swift corrections or extended consolidations.
Primary Risk Factors for USD/JPY:
– Possible intervention by the Bank of Japan (BoJ) or Japanese Ministry of Finance if the yen continues to weaken substantially or breaches key psychological levels like 160.
– Changes in US Treasury yields and their impact on interest rate differentials, which have been a key driver for the pair’s appreciation.
– Speeches and policy positioning from the Federal Reserve as the market assesses peak rate levels and timing for future cuts.
– Unexpected geopolitical escalations (e.g., tensions in East Asia, Taiwan Strait, etc.) could lead to safe-haven flows into JPY.
– Broader risk sentiment and equity performance also indirectly influence USD/JPY, especially during periods of capital repatriation.
Any of these factors, if activated, could cause significant volatility and abrupt retracement toward key support levels.
Medium- to Long-Term Trend
Zooming out to the weekly and monthly charts reveals a bullish structure that remains firm but might be due for a consolidation phase. Traders and investors should remain vigilant for any bearish reversal signals, especially if price fails to rise above recent highs.
Medium-Term Support and Resistance Levels:
– Resistance:
– 157.70 (near-term high and resistance)
– 160.00 (strong psychological level; untested since early
Explore this further here: USD/JPY trading.