USD/JPY Weekly Technical Outlook
(Original analysis by ActionForex.com)
Rewritten and expanded for clarity and length.
Overview
The USD/JPY currency pair continued its upward trajectory last week, sustaining strong bullish momentum as the US dollar remained supported by firm Treasury yields, while the Japanese yen continued to suffer under the Bank of Japan’s persistent commitment to its loose monetary policy. After a minor dip, USD/JPY regained upward traction, closing the week significantly above support zones, indicating potential for further gains.
The pair remains positioned within a broader uptrend on both weekly and daily charts, with key technical indicators favoring the US dollar. This article examines the latest price movements, important support and resistance levels, trend structures, and what traders might anticipate in the near term, based on patterns and technical signals.
Recent Price Action
– USD/JPY traded higher overall last week, retracing early losses and closing firmly above the 148.80 area.
– The pair saw an intraday dip but found strong demand, bouncing solidly and ending the week with bulls in control.
– The prevailing uptrend remains structurally intact, with price action above major moving averages.
– The consistent higher highs and higher lows further support the bullish technical setup in the short to medium term.
Technical Perspective
From a technical analysis viewpoint, the continuation of the bullish trend takes primacy, barring any fundamental shocks or unexpected central bank actions.
Weekly Chart Analysis
– On the weekly chart, price action continues to advance in line with a well-established uptrend from the 127.20 low in January 2023.
– The pair has breached the psychological 150.00 level once more, approaching February’s highs and targeting new multi-decade resistance levels.
– Momentum indicators remain supportive of further gains:
– The Relative Strength Index (RSI) is staying comfortably above 50, suggesting ongoing bullish momentum.
– MACD (Moving Average Convergence Divergence) lines remain elevated, with no clear signs of bearish divergence.
– Current price is trading well above the 20-week and 50-week exponential moving averages (EMAs). This alignment supports a continuation of upward pressure.
Daily Chart Analysis
– On the daily timeframe, the pair has bounced notably from the 148.80 support region, resuming its bullish pattern.
– Price is moving within a rising channel, with no indication of a break below support lines.
– The next overhead resistance rests at 151.90, which remains a standout level from October 2023, later revisited in February 2024.
– Beyond 151.90, price could test 152.50 and 153.50, levels not seen since 1990.
– 200-day EMA remains flat to upward-sloping, indicating solid longer-term trend support.
– Despite short-term consolidation phases, the pair retains a “buy-the-dip” structure.
Key Support Levels
Should the pair encounter selling pressure or technical correction, it faces a sequence of significant support zones:
– 148.80: This serves as near-term support, with repeated bounces confirming its relevance.
– 147.20: A short-term rising trend line crosses this area. A break below this could signal deeper retracement.
– 145.85: Mid-February swing low and breakout region.
– 143.35: Previous area of resistance turned support in late 2023.
Key Resistance Levels
Resistance levels that come into focus in potential bullish scenarios include:
– 151.90: Major multi-year resistance last seen in October 2023. This level has already faced multiple failed breakouts in recent years.
– 152.50: Psychological and historical resistance.
– 153.50: An inflection point from the 1990 yen appreciation era.
– 155.00: Round number, psychological zone, and potential magnet for speculative flows if bulls retain control.
Trend Structure
USD/JPY shows a consistent structure of:
– Higher highs
Explore this further here: USD/JPY trading.