Original article by ActionForex.com. The following is a rewritten and expanded version of the original forecast published at https://www.actionforex.com/technical-outlook/usdjpy-outlook/607574-usd-jpy-weekly-outlook-421/.
USD/JPY Weekly Analysis: Consolidation Sees Further Pullback, Longer-Term Bullish Signs Intact
Overview:
The USD/JPY pair experienced a corrective pullback last week, marking an end to its strong bullish trend over the past several weeks. Yet in the context of the broader picture, the longer-term uptrend remains structurally supported. The weekly movement suggests that the pair may consolidate further before initiating its next directional move. However, downside momentum is moderating, and key support levels remain unbroken, implying that buying interest is likely to return in the medium term.
Short-Term Technical Update:
– USD/JPY pulled back from highs above 156.00 to currently trade around the 153.00 region, reflecting a moderate corrective move rather than a full trend reversal.
– The near-term support is still intact, with the 151.86 level acting as a soft floor. Below, the next significant support lies at 151.16.
– Momentum indicators on the 4-hour chart suggest waning bullish momentum but without signaling strong downside pressure. RSI remains neutral, and MACD shows a weakening of positive divergence.
Immediate Outlook:
– The immediate bias for USD/JPY remains slightly bearish in the early sessions of the week. A further retest of nearby support levels cannot be ruled out.
– Should the pair break below the 151.86-151.16 support zone convincingly, the next target to the downside would be near the 149.17 support, which aligns with the 38.2% Fibonacci retracement from the low at 140.25 to 160.20.
– However, failure to break below 151.16 would likely draw in dip buyers and suggest that consolidation may give way to another upside push toward the 156.00 resistance.
Trend Continuation Scenarios:
If price action stabilizes and reverses upward from the current support region, the following upward trajectory could develop:
– Immediate resistance at 155.45 would serve as the first bullish target.
– Sustained momentum above that level would expose the multi-decade high zone around 160.20.
– This previous resistance level from late April marks the peak of the current bullish cycle, and a break above it would open the door toward 162.00 and possibly 165.00 in the longer run.
Medium-Term Structural Assessment:
Despite the recent correction, the longer-term structure remains firmly bullish:
– The weekly chart shows consistent higher highs and higher lows, confirming that the primary trend remains upward.
– Both the 50-week and 200-week Exponential Moving Averages are trending upward, with the pair trading well above both.
– The Ichimoku cloud system on the weekly chart shows a bullish alignment, with price action far above the cloud, Tenkan-sen above Kijun-sen, and a positive Chikou span.
Key Technical Levels to Watch:
Support Levels:
– 151.86: Minor support zone (former resistance recently turned support).
– 151.16: Strong horizontal support, confirmed by previous technical reactions.
– 149.17: 38.2% Fibonacci retracement and psychological level.
– 146.46: Deeper correction support.
– 140.25: Structural swing low and a key turning point.
Resistance Levels:
– 155.45: Immediate upper boundary of current descending channel.
– 156.78: Minor intraday resistance.
– 160.20: Yearly high and longer-term resistance zone.
– 162.00–165.00: Above-horizon projection if 160.20 is breached.
Fundamental Influences:
Fundamental developments continue to shape USD/JPY’s trajectory, especially as monetary policies in the US
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