Title: USD/JPY Attempts to Ease Overbought Pressure Amid Prolonged Bullish Momentum
Source: Economies.com | Original Author: Economies.com Analysts
Original Article Link: https://www.economies.com/forex/usd-jpy-analysis/the-usdjpy-is-attempting-to-offload-its-overbought-conditions-analysis-06-11-2025-122465
The USD/JPY currency pair continues to show sustained upward momentum, attempting to alleviate the impact of overbought conditions that have materialized following a strong bullish trend. As of June 11, 2025, the pair is trading just beneath recent highs, as technical indicators suggest a potential short-term reprieve from the steep ascent. However, the overall outlook remains bullish as long as the pair remains above critical support zones.
This analysis delves deeper into the technical posture of USD/JPY, fundamental factors influencing the pair, and prospective scenarios over the short and medium term.
Overview of the Current USD/JPY Trend
The bullish performance of USD/JPY has been reinforced by a combination of technical momentum and macroeconomic divergences between the United States and Japan. The pair has recently tested key resistance levels and remains well above moving averages that support continued upside.
Key Observations:
– USD/JPY has already approached previously established resistance near the 157.70–157.90 zone.
– Technical indicators, such as the Relative Strength Index (RSI), are signaling overbought territory (typically above 70), triggering the possibility of a corrective pullback.
– The price action remains positioned above the 50-day and 100-day Exponential Moving Averages (EMAs), reinforcing market sentiment favoring further gains.
– A short-lived bearish correction could enable the market to consolidate recent gains and prepare for another leg upward.
Technical Analysis Highlights
Daily Chart Behavior:
– Price Structure: The pair is moving within a bullish channel on the daily chart, showing consistent higher highs and higher lows. Momentum is still strong, albeit with signs of exhaustion in the short term.
– Moving Averages: The 50-day EMA currently provides dynamic support around the 155.00 mark, while the 100-day EMA trails below at approximately 153.00.
– RSI Level: Hovering around 75, the RSI confirms overbought conditions. A dip toward 60 could denote healthy normalization without invalidating the uptrend.
– MACD (Moving Average Convergence Divergence): Still in bullish territory, the MACD supports the medium-term upside continuation, though its histogram is beginning to contract, which could suggest slowing momentum.
Key Support and Resistance Levels:
Support:
– 156.20 – Initial intraday support, aligned with slight consolidation.
– 155.00 – Corresponds with the 50-day EMA and near trendline support.
– 153.50 – A deeper retracement level, which would still be consistent with an uptrend correction and a higher low.
Resistance:
– 157.90 – The recent peak and psychological resistance area.
– 158.50 – A likely near-term target if bullish momentum resumes.
– 160.00 – A major resistance level not seen since 1990, should buyers maintain control.
Short-Term Outlook
While immediate pressure suggests a possible short-term decline to work off technical overbought readings, the broader bullish trend remains intact. A controlled pullback would provide a healthier structure to the ongoing rally, creating new support zones that can act as springboards for further upside.
Scenarios to Watch:
1. Bullish Continuation (Preferred Scenario)
– A minor dip toward 156.20, followed by renewed buying pressure.
– Break above 157.90 would confirm bullish continuation targeting 158.50 and possibly 160.00.
– Supporting indicators: RSI corrects modestly, MACD regains acceleration, price remains above trendline support.
2. Bearish Retraction (Secondary Scenario)
Explore this further here: USD/JPY trading.