USD/JPY Mid-Day Outlook: June 10, 2024
Source: ActionForex.com | Original Author: ActionForex
Overview:
The USD/JPY pair continues to display a consolidative pattern following a recent solid rally through May 2024. After reaching a high at 157.70, the pair has entered a corrective phase, oscillating within a tight range while maintaining its bullish structure on medium and long-term charts. The current price action as of June 10, 2024, suggests moderate downward bias in the short term, but underlying momentum still leans toward the upside barring a deeper technical breakdown.
Intraday developments and broader financial market dynamics are contributing to the pair’s cautious movement. Market participants are closely watching upcoming U.S. inflation data as well as the outcome of the Federal Reserve’s next policy meeting, both of which are slated to have material impacts on the greenback’s outlook.
Key Technical Highlights:
• Intraday bias in USD/JPY remains neutral for now.
• Price action since the recent high at 157.70 suggests a potential short-term consolidation.
• Initial support stands at 155.71, the June 7 low, followed by a stronger level at 154.53.
• Resistance appears at 157.70, the recent high. A breach would confirm resumption of the uptrend.
• The overall structure remains bullish unless critical supportive trendlines are broken.
• Daily RSI shows a slight divergence suggesting weakening momentum, though not an outright reversal.
Price Movement and Near-Term Forecast:
In the immediate term, USD/JPY is entrenched in a very narrow range as dollar bulls pause for a catalyst to continue the trend. Recent trading has seen the pair move sideways between approximately 156.00 and 157.70. This tightening range may present a volatility compression that could precede a breakout.
• If USD/JPY manages to break above 157.70, bullish momentum could accelerate to retest the 160.00 psychological zone.
• On the downside, a firm break below 155.71 triggers deeper correction toward the 154.53 support, followed by 152.80 as a medium-term floor.
Technical Indicators – Daily Timeframe:
• RSI (Relative Strength Index): Circulating around the 60-65 zone. While above the neutral 50 level, the RSI shows slight bearish divergence compared to price, suggesting momentum might be fading.
• MACD (Moving Average Convergence Divergence): The histogram is flattening, signaling consolidation rather than strong directional reading. However, the MACD line remains above the signal line, consistent with bullish conditions.
• Moving Averages:
– 20-day SMA is rising, currently supporting price action near 155.50
– 50-day SMA is also upward sloping, residing closer to 153.00
– These averages act as dynamic support and highlight the structurally bullish tone in the medium term
Bigger Picture – Medium and Long-Term View:
Zooming out, the USD/JPY remains well entrenched in an uptrend initiated back in early 2023, having made a series of higher highs and higher lows. The pair is trading above its critical trend-supporting levels, and its behavior near strong resistance levels signals the possibility of further bullish extension if fundamental conditions align.
• From a broader perspective, the rally from the January 2023 low at approximately 127.21 is developing within a well-defined ascending channel.
• Sustained strength above the March 2024 high of 151.90 has flipped old resistance into a significant support base.
• Assuming no news-induced shock, the next upward target lies near the 160.00 round number with minor resistance at 158.20.
Support and Resistance Levels:
• Immediate Resistance:
– 157.70: The current local high and immediate ceiling
– 158.20: Upper bound of
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