Title: USD/JPY Registers Clear Overbought Signals – In-depth Analysis
Source: Economies.com | Analysis by Economies.com Analyst | Published September 10, 2025
URL: https://www.economies.com/forex/usd-jpy-analysis/the-usdjpy-shows-clear-overbought-signals–analysis-10-09-2025-120995
Overview:
On September 10, 2025, the USD/JPY currency pair exhibited strong upward momentum, with prices approaching key resistance levels. However, the technical outlook reveals notable overbought signs, which suggest the bullish trend may encounter challenges in the near term. This analysis dives deeper into the pair’s technical configuration, market sentiment, and potential scenarios, providing traders with insights to navigate current price dynamics.
Key Highlights:
– USD/JPY has maintained a bullish tone, moving steadily toward the resistance area at 148.40.
– Overbought signals are emerging across various technical indicators, potentially prompting a corrective movement or consolidation.
– The general trend remains optimistic as long as prices stay above the key support at 147.40.
– The current targets remain around 148.90 before any significant reversal might occur.
Detailed Technical Breakdown:
1. Current Price Action:
– The USD/JPY pair extended its bullish rally, marking new multi-month highs.
– Price action suggests a continuation of the upward trend in the short term, as bulls appear in control.
– The pair is hovering just below the resistance range at 148.40, a level previously tested in earlier trading sessions.
2. Resistance and Support Levels:
– Resistance:
• Immediate resistance is located at 148.40.
• Breaching this level paves the way for further gains toward 148.90.
• Success beyond 148.90 could open doors to psychological resistance points near 149.50 and 150.00.
– Support:
• The critical near-term support lies at 147.40.
• A break below 147.40 would negate short-term bullish momentum and possibly initiate more pronounced downward correction.
• Additional support may appear around 146.50 and 146.00 if bearish momentum gains strength.
3. Overbought Condition:
Several key indicators are now highlighting overbought conditions for the USD/JPY pair:
– The Relative Strength Index (RSI) is trading above 70, suggesting the pair is entering or already in overbought territory.
– The stochastic oscillator is also reflecting a similar condition, with both %K and %D lines staying above the usual upper-bound threshold.
– These technical signals typically precede a potential reversal or, at minimum, a period of sideways consolidation.
4. Trend Indicators:
The USD/JPY remains within an established upward channel, reflecting medium-term bullish bias:
– The 50-day simple moving average (SMA) is trending higher, offering dynamic support.
– The 100-day and 200-day SMAs continue to incline, confirming the broader upward trajectory.
– Price action shows higher highs and higher lows, a typical characteristic of a bullish continuation pattern.
5. Fibonacci Retracement Perspective:
Applying Fibonacci retracement levels from the previous bearish correction reveals that the pair has surpassed the 78.6% retracement near 147.50.
– The move above this level solidifies bullish strength and places focus on reaching full retracement.
– The 100% Fibonacci extension lies around 149.00, aligning with one of the key psychological resistance zones.
6. Fundamental Context:
– The U.S. Dollar has generally strengthened due to expectations the Federal Reserve may maintain higher interest rates for longer, supporting demand for the greenback.
– Meanwhile, the Bank of Japan continues to maintain an ultra-accommodative monetary policy stance, keeping the Japanese Yen subdued.
– The interest rate differential between the two economies is a key
Explore this further here: USD/JPY trading.