USD/JPY Weekly Technical Outlook – Adapted from ActionForex.com
Original article by Action Forex Analysts: https://www.actionforex.com/technical-outlook/usdjpy-outlook/607574-usd-jpy-weekly-outlook-421/
Overview
The USD/JPY pair ended the recent trading week on a relatively soft note, failing to maintain upward momentum despite a slight recovery. Price movements suggest consolidation is likely to continue, with the pair staying in a range above the near-term support level. Uncertainty prevails due to large interest rate differentials between the US and Japan, as well as diverging central bank policies. Investors and traders should monitor upcoming economic data and potential policy shifts from the BoJ and Federal Reserve that could exert further directional influence.
Price Action Summary
– USD/JPY concluded the week slightly subdued, unable to sustain prior rallies.
– Recoveries from the 154.53 support level remain limited.
– Despite the consolidation, uptrend pressure remains as long as price stays above the 154.53 support zone.
– Resistance at the 160.20 high from late April remains a key target for buyers.
– If 154.53 is decisively broken, a deeper pullback could materialize, signaling a potential change in direction or deeper consolidation.
Technical Indicators and Chart Patterns
Daily and Weekly Chart Analysis:
– On the daily chart, USD/JPY remains within the corrective zone seen post-intervention by the Bank of Japan in April and May.
– Minor downtrend from the 160.20 resistance remains intact though lacking major conviction from sellers.
– Support at 154.53 is acting as the bullish defense zone. A solid breach below that area might weaken the recovery structure.
– Weekly candlestick patterns do not show convincing reversal signals, suggesting indecision and range-bound conditions.
Moving Averages:
– The 20-day Exponential Moving Average (EMA) offers rounding resistance near 157.50.
– Price remains above the 55-day EMA, signaling an overall bullish medium-term stance.
– Longer-term moving averages align in favor of the bulls, provided 154.53 holds and price remains contained within the recent range.
Momentum Indicators:
– RSI (Relative Strength Index) on the daily chart has pulled back from overbought territory to a neutral zone around 50, lacking a clear directional bias.
– The MACD (Moving Average Convergence Divergence) remains close to the signal line, with no strong divergence or crossover setup.
– Weekly RSI is still above 50, supporting the broader uptrend bias, but lacks momentum to trigger renewed buying interest without catalyst events.
Fibonacci Retracement and Levels of Interest
Retracement Areas:
– From the recent rally from 151.86 to the 160.20 high, the 38.2 percent Fibonacci retracement level is near 157.03, followed by deeper retracement levels:
– 50 percent at 156.03
– 61.8 percent at 155.03
– These retracement levels serve as potential interim supports if the price revisits below 157.00.
Upside Targets:
– Immediate resistance remains around 158.00 to 158.50
– A successful break and consolidation above 158.50 could pave the way for a re-test of the April high at 160.20
– Breaking 160.20 could potentially clear the path for further upside toward 161.70 and beyond
Support Zones:
– Immediate support lies at 157.00 followed by the critical 154.53 zone. Deeper declines below 154.53 would challenge the medium-term bullish structure.
– Sizable downside risk emerges if 154.53 is lost, as it could lead to a decline toward the 152.00 region.
Fundamental Considerations in Conjunction with Technicals
– One of the main macroeconomic drivers for the USD/JPY pair is the divergence between the US Federal Reserve and the Bank
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