USD/JPY Extends Gains Amid Bullish Momentum, Faces Fibonacci Resistance
Original Article by EconoTimes
The USD/JPY currency pair continues its upward movement, extending its recent gains amid strengthening bullish sentiment. The pair is trading close to the 145.90 level and is showing signs of further bullish potential, although resistance from key Fibonacci retracement levels could limit further upside.
This article provides an in-depth technical and fundamental analysis of the current USD/JPY price action, taking into account resistance levels, momentum indicators, and overall market sentiment.
Current Price Movement
– As of writing, USD/JPY is trading around 145.90, showing sustained strength over recent sessions.
– The currency pair has maintained upward momentum over multiple days, indicating the persistence of bullish sentiment among traders.
– The price is close to the 23.6% Fibonacci retracement level calculated from the 151.94 high to the 137.24 low, which currently acts as a significant resistance area.
– Despite this resistance, the pair is testing new intraday highs and remains well bid, underpinned by strong buying pressure.
Technical Overview
– The 23.6% Fibonacci retracement resistance at 146.05 is an important level to monitor. A clear break above this level would indicate renewed bullish momentum and open the door for further gains toward higher resistance zones.
– The current technical structure shows a bullish bias, supported by momentum indicators on the daily chart.
Key Technical Indicators:
1. Relative Strength Index (RSI)
– The RSI is currently around 62.0 on the daily chart.
– This reading supports the bullish case, although it is approaching overbought territory.
– RSI values above 70 suggest overbought conditions, so a close watch is required in the coming sessions.
2. Moving Averages
– The pair is trading above the 5-day and 21-day Exponential Moving Averages (EMAs), indicating short-term bullishness.
– Current levels:
– 5-day EMA: 145.45
– 21-day EMA: 144.50
– The EMAs align with the direction of recent price action, confirming the strength of the prevailing uptrend.
3. MACD (Moving Average Convergence Divergence)
– MACD is in bullish territory and shows a positive crossover.
– The histogram bars are building above the zero line, indicating a solid upward momentum.
– This supports continued movement higher if buyers maintain control.
4. Ichimoku Cloud
– The price is currently above the cloud on the daily timeframe, which is a strong bullish signal.
– Tenkan-Sen and Kijun-Sen lines are both trending upwards, confirming the positive bias.
– The Chikou Span (lagging line) is also above the price and moving averages, reinforcing the upward trend.
Support and Resistance Levels
Immediate resistance levels:
– 146.05: 23.6% Fibonacci retracement of the decline from 151.94 to 137.24.
– 147.00: Psychological level and round number resistance.
– 148.50: Prior swing high and congestion zone.
– 150.00: Major psychological resistance level and a pivot from earlier months.
Immediate support levels:
– 145.20: Previous short-term resistance turned support.
– 144.50: 21-day EMA, which serves as dynamic support.
– 143.90: Former swing low and an area buyers may defend.
– 143.00: Strong horizontal support zone seen on the 4-hour and daily charts.
Fundamental Factors Supporting USD/JPY
Besides technical indicators, the USD/JPY is largely driven by macroeconomic factors and interest rate differentials. The pair tends to respond sensitively to changes in U.S. monetary policy, inflation data, and safe-haven flows.
Key drivers of recent gains:
1. Diverging Central
Explore this further here: USD/JPY trading.