Title: USD/JPY Daily Technical Outlook – May 6, 2024
Source: ActionForex.com | Original Author: ActionForex Analysts
URL: https://www.actionforex.com/technical-outlook/usdjpy-outlook/604671-usd-jpy-daily-outlook-2184/
Overview:
The USD/JPY currency pair has entered a consolidative phase following a period of heightened volatility and upward momentum. Monday’s trading session revealed limited movement, with the pair holding recent gains and lacking directional commitment. This daily technical outlook examines the pair’s short-term trajectory, key support and resistance levels, and momentum indicators, offering a comprehensive analysis for traders and investors.
Short-Term Outlook:
USD/JPY retains a mildly bullish bias in the short term, remaining well above key support levels. However, the momentum has shifted into a sideways consolidation after peaking at a multi-year high at 160.20. The current retracement after the sharp surge suggests market participants are watching for a more decisive move, possibly after further macroeconomic or monetary policy developments.
Key Technical Features:
– **Immediate resistance:** 157.98 (near-term high)
– **Immediate support:** 153.58 (minor support level)
– **Trendline support:** Near 150.80 (ascending trendline from earlier lows)
– **Multi-year resistance:** 160.20 (April high and psychological level)
– **Fibonacci retracement level:** 153.58 (38.2 percent retracement of 140.25 to 160.20 rally)
Intraday Analysis:
Intraday movement on Monday remained limited, reflecting uncertainty or the need for a catalyst. Price movement indicates that the upside remains favored, conditional on the maintenance of support levels. Buyers are likely to re-enter above 153.50, especially if fundamental data continue to favor the US dollar narrative or highlight divergences in central bank policies between the US Federal Reserve and the Bank of Japan (BoJ).
Key Observations:
– USD/JPY is trading above major moving averages, including the 50-day and 100-day simple moving averages (SMAs).
– Momentum indicators (such as the RSI and MACD) have gradually cooled from overbought levels, suggesting consolidation rather than reversal.
– A break above the near-term resistance of 157.98 is needed to confirm the resumption of the previous bullish trend.
– Any move below 153.58 could suggest a deeper retracement and test of stronger support near 150.80.
Momentum Indicators:
– **Relative Strength Index (RSI):**
The daily RSI is situated around the mid-60s, reflecting decreased but still bullish momentum. The initial overbought condition has eased, giving the market breathing room to gather strength for another push higher.
– **Moving Average Convergence Divergence (MACD):**
The MACD line continues to hover above the signal line, though the spread has narrowed. This aligns with ongoing consolidation, indicating momentum is pausing before the next major move.
– **Bollinger Bands:**
Price action has started to stabilize within the upper range of the Bollinger Bands. This again supports the view of a sideways near-term phase unless volatility increases.
Support and Resistance Technical Levels:
Support Levels:
– 153.58: This level marks the 38.2 percent Fibonacci retracement of the surge from 140.25 to 160.20 and serves as immediate downside support.
– 152.00: Acts as a psychological round number and coincides with prior resistance turned support.
– 150.80: Represents trendline support from the upward channel starting from the January lows and has been tested across multiple sessions.
– 148.70: Includes the 50 percent retracement level and reflects a key line in determining the bullish-bearish medium-term boundary.
Resistance Levels:
– 157.98: Acts as the first major resistance ahead of a re-challenge
Explore this further here: USD/JPY trading.