Title: USD/JPY Daily Technical Outlook – May 21, 2024
Source: ActionForex
Original Author: ActionForex Technical Analysts
Link: [USD/JPY Daily Outlook](https://www.actionforex.com/technical-outlook/usdjpy-outlook/609398-usd-jpy-daily-outlook-2212/)
Overview:
The USD/JPY pair is making headlines again as it trades slightly above the 156.00 level. Movement in the pair has been closely watched due to interest rate divergence between the U.S. and Japan, speculation over intervention by Japanese authorities, and broader global macroeconomic trends.
Following recent consolidation, the pair shows signs of upward momentum, though there are technical resistance levels that could cap any significant gains. On the flip side, downside risks remain limited unless there is a distinct breakdown through key support levels.
This article provides a thorough breakdown of the current technical landscape, potential scenarios that could unfold in the near term, and a broader look at the medium-term outlook. The sentiment remains cautious as the market digests U.S. Federal Reserve policy signals, Japanese monetary stance, and macroeconomic data releases from both economies.
Short-Term Technical Analysis:
As of May 21, 2024, USD/JPY remains on steady ground in the short-term chart, though the pair appears hesitant to make a firm break higher. Below is an analysis of its current setup:
– Price Action:
– USD/JPY is trading near 156.30 in today’s session, staying within a relatively narrow range.
– Minor resistance continues to develop around 156.78, with a more significant ceiling likely at 160.20.
– Moving Averages:
– The 4-hour 55 EMA (Exponential Moving Average) continues to provide dynamic support.
– Price action holding above this EMA is considered a bullish short-term sign.
– Any sustained dip below this level would indicate potential for deeper correction.
– RSI (Relative Strength Index):
– RSI on the 4-hour chart remains above the 50 mark, suggesting buyers are still in control.
– However, there is no overbought signal yet, meaning there is room for further bullish movement.
– MACD (Moving Average Convergence Divergence):
– The MACD sits in positive territory but has flattened out slightly, reinforcing the consolidation narrative.
– Immediate Resistance and Support Levels:
– Resistance: Minor resistance at 156.78, with a potential breakout opening the door to 160.20.
– Support: First line of defense at the intraday low of 155.69, then stronger support at 153.59.
– Deeper correction would target the 151.86 support, a pivotal structure from early May.
Short-Term Strategy:
– A firm break above 156.78 may confirm continuation of the uptrend toward 160.20.
– Traders could look for bullish continuation patterns above the 4-hour 55 EMA for potential long entries.
– Bearish pressure must overcome 155.69 and then 153.59 to open room for reversal confirmation.
Medium-Term Technical Outlook:
From a daily perspective, the uptrend remains largely intact. The pair has been forming a bullish structure since early 2023, and retracements have largely been short-lived.
– Trend Structure:
– USD/JPY maintains a sequence of higher highs and higher lows.
– The next upside target at 160.20 is in view, provided the price sustains momentum.
– Previous Resistance Zones:
– Past resistance points near 151.86 have now turned into support.
– The structure demonstrates that price is respecting significant historical levels.
– Moving Averages (Daily Chart):
– Price remains comfortably above the 55-day EMA and 200-day SMA.
– These indicate that medium-term trend strength is favoring bulls.
– RSI and Stochastic Indicators:
– Daily RSI is approaching overb
Explore this further here: USD/JPY trading.