**USD/JPY Weekly Outlook – Analysis and Forecast**
Original analysis by ActionForex.com
The USD/JPY currency pair showed resilience over the past week, rebounding strongly from recent lows and demonstrating potential for near-term bullish continuation. This outlook examines the recent price action of USD/JPY, provides insights into technical indicators and chart patterns, and outlines likely scenarios for investors and traders based on support and resistance levels. The key focus will be the 155.20 resistance zone and broader trends in the Japanese Yen’s performance amid shifts in monetary policy and U.S. data flows.
Current Weekly Overview
– USD/JPY ended the week with a significant rebound, climbing after testing initial near-term support.
– The pair maintained footing above both the 55-day Exponential Moving Average (EMA) and key trendlines, suggesting that bullish momentum could be gathering strength.
– Despite BOJ interventions earlier in the month, a weakening Yen continues to pressure the currency pair upward.
– The overall structure now favors more upside potential if resistance around 155.20 is breached.
Technical Summary
– Resistance Level: Immediate resistance lies around 155.20, the high recorded in April.
– Support Level: The recent retracement found support near 151.85. This area corresponds to both horizontal price memory and convergence of mid-term moving averages.
– Moving Averages: USD/JPY closed the week above the 20-day and 55-day EMAs, reinforcing a continuation of the bullish imbalance.
– RSI: The Relative Strength Index remains neutral, hovering just below overbought territory, indicating potential for further gains without an immediate reversal risk.
– MACD: The MACD (Moving Average Convergence Divergence) indicator shows rising histogram bars and a renewed bullish crossover, suggesting strengthening buying momentum.
Short-Term Price Scenarios
If momentum continues and the 155.20 resistance is decisively broken, the next bullish target for USD/JPY will be the psychological and technical barrier at 160.00. Price could approach this level smoothly if macroeconomic data from the United States continues to support tighter monetary policies.
On the flip side, if renewed selling pressure reemerges around 155.00–155.20 and the pair fails to maintain its strength, bears may attempt to drag the pair down toward the key support region at 151.85. This would serve as a gauge for further downside correction.
Possible Bullish Scenario:
– A strong daily close above 155.20 would likely trigger expansive buying, building the foundation for a rally that could approach 157.80 initially.
– Extension beyond 157.80 points toward a probable test of previous highs near the 160.00 handle.
– A clean break above 160.00 could usher in a new uptrend phase, indicating sustained optimism for the U.S. dollar and risk aversion around Japanese Yen strength.
Bearish Counter-Scenario:
– If the USD/JPY makes a sharp reversal and closes below 151.85, the retracement could deepen.
– Sellers would then target lower support at 150.75, followed by the 149.00 area.
– A sustained move back within the 149.00–150.00 range would invalidate near-term bullish momentum and suggest a market preference toward risk-off behavior or rising expectations of BOJ intervention.
Medium-Term Outlook
In the broader time frame, USD/JPY continues to trade in a widening ascending channel that started 18 months ago. The long-term trajectory remains positive unless the pair breaks below key structural supports. In recent months, interventions by the Bank of Japan placed a temporary ceiling on excessive speculative surges past 155.00.
Fundamental Factors Supporting USD/JPY Strength:
– Divergence in monetary policies: The Federal Reserve remains relatively hawkish compared to the Bank of Japan, which still operates with ultra-loose monetary policy.
– Ten-year U.S. Treasury yields remain elevated, boosting demand for rate-sensitive Dollar assets and increasing USD attractiveness against the lower-y
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