Below is a rewritten and expanded version of the article “USD/JPY Weekly Outlook” originally published by ActionForex.com. Full credit for the original analysis goes to the ActionForex.com team.
USD/JPY Weekly Technical Outlook (Expanded Analysis)
The USD/JPY currency pair showed mixed performance over the past week, with the rally held back near the 157.70 resistance area. Despite emerging strength earlier in the week, momentum proved insufficient to push prices decisively higher. The pair traded sideways after failing to maintain gains above key levels. Markets are now waiting for further confirmation on direction, especially with potential interventions by Japanese authorities looming.
In this week’s expanded technical outlook, we’ll take a comprehensive view of the recent price movement, analyze key support and resistance levels, and explore possible scenarios for the coming sessions. Overall market sentiment remains cautious, as traders continue to gauge the Federal Reserve’s monetary policy path in contrast to the Bank of Japan’s persistently dovish stance.
Weekly Review Summary: Consolidation Below Resistance
– Last week, USD/JPY traded within a defined range, with highs capped just under 157.70.
– The pair displayed mild bullish bias but lacked the momentum to extend the uptrend decisively.
– Support was held near the 155.50 zone, creating a relatively narrow consolidation zone.
– No significant breakout was observed despite brief attempts to move higher during mid-week trading.
The pair remains in a technically strong position overall, but near-term momentum has softened. Buyers appear cautious, especially considering the risk of intervention from Japanese officials who have historically responded to rapid yen depreciation.
Technical Analysis: Daily and Weekly Chart Overview
Moving to a detailed technical outlook, we shift focus to critical support and resistance areas, trendlines, and indicators.
Resistance Levels
– 157.70: This is the immediate resistance level, near the previous week’s high. Bulls need a firm break above this level to confirm renewed strength.
– 160.00: A psychological level, and also likely the next point of resistance if 157.70 is cleared. It could serve as a magnet for buyers in a breakout scenario.
– 160.20: Prior key resistance tested in late April before the sharp reversal. This remains a significant obstacle for bulls.
Support Levels
– 155.50: Immediate support, tested multiple times throughout the past week.
– 153.00: A stronger support zone and the lower boundary of the broader consolidation channel.
– 151.85: Former resistance turned support from earlier in Q1, now aligned with the 50-day EMA.
Trend Analysis
– On the daily chart, the USD/JPY remains in an overall uptrend, marked by higher highs and higher lows.
– The 20-day EMA continues to track above the 50-day EMA, which supports the medium-term bullish bias.
– Weekly RSI indicates no signs of bearish divergence, suggesting the uptrend still has underlying strength.
– MACD histogram remains in positive territory but shows diminishing momentum.
Long-Term Fibonacci Analysis
– Applying a Fibonacci retracement on the move from the March low (around 146.50) to the April high (near 160.20), the key retracement levels are:
– 23.6%: 156.82
– 38.2%: 154.88
– 50.0%: 153.35
– 61.8%: 151.82
All these levels provide potential areas of dynamic support should the pair correct lower.
Outlook for the Coming Week
As long as the USD/JPY pair stays above the 153.00 area, the broader bullish structure remains intact. The most likely scenario in the short term is continued consolidation between 155.50 and 157.70, pending a catalyst to break the range.
Key Bullish Scenario
– If buyers manage a decisive daily close above 157.70, further upside can be expected.
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