Title: USD/JPY Analysis: Bulls Reclaim Technical Ground, Eyes on Momentum Continuation
Source: Original article by Greg Michalowski, published on ForexLive via TradingView News.
The USD/JPY pair has recently advanced through a significant technical level, indicating that buyers have regained control. After experiencing a recent dip, the pair retraced losses and now sits back above critical moving averages, encouraging further bullish sentiment. This movement invites questions about the potential for continued momentum and whether the bullish push will sustain in the face of potential resistance and macroeconomic factors.
This analysis elaborates on the current technical landscape for USD/JPY, details support and resistance zones, and outlines what traders should consider as price action unfolds.
Recent Price Action and Technical Recovery
– Following a retracement in recent sessions, USD/JPY found a base before regaining bullish traction.
– Buyers pushed the price back above the 100-hour and 200-hour moving averages, which were key downward barriers.
– The reclaim of these technical thresholds indicates increasing bullish strength, especially after the pair had dipped below these MAs during previous sessions, triggering bearish momentum.
Key Technical Breakthroughs
The following chart-based observations help highlight where the market currently stands:
• 100-hour Moving Average (MA):
– Before today’s session, the 100-hour MA stood as short-term resistance.
– Bulls cleared this level during an upward thrust, suggesting an important shift in sentiment.
– This MA now serves as initial intraday support in the short-term outlook.
• 200-hour Moving Average (MA):
– Approached closely by the currency pair during its upward move.
– The decisive break above the 200-hour MA underscores a more robust buying conviction.
– A continued hold above this level would signal further bullish bias.
• 50% Retracement Level:
– The price now trades above the 50% midpoint of the most recent downswing.
– This retracement level serves as a marker of market balance; trading above it signals potential for additional bullish targets to be pursued.
• Trendline Dynamics:
– Prior trendline resistance was breached during the recent upside move.
– The breakout adds technical confidence and may attract more trader participation on the long side.
What the Momentum Suggests
Now that significant technical zones have been reclaimed, the immediate focus for USD/JPY traders centers on maintaining the momentum above moving averages and retracement levels. Here’s what current price dynamics suggest:
• Sustained Closes: The USD/JPY must continue to post candles (on hourly and 4-hour charts) above key MAs to confirm sustainability of the breakout.
• Buyer Conviction: The proximity of price action to the breakout levels signals potential vulnerability to reversals unless fresh buying volume enters the market.
• Volatility Consideration: As traders approach major economic headlines and central bank updates, increased volatility is possible, putting pressure on narrow technical levels.
Important Support and Resistance Levels to Watch
For traders navigating the USD/JPY landscape, the following levels are critical in assessing the potential path forward:
Support Levels:
– 200-hour MA (approx. 156.15 to 156.20 level): A fall below this pivot could indicate weakening momentum and open the door to a retest of previous lows.
– 100-hour MA (approx. 155.90): Acts as secondary technical support and a potential re-entry level for buyers if price rotates back after an initial rejection.
– Intraday trendline (established during recent rise): Support here would reinforce the bullish structure.
Resistance Levels:
– 156.80: A short-term resistance point just above current price, offering the next challenge.
– 157.10 to 157.30 zone: A significant supply level from previous price clusters and swing highs. A breakthrough here could propel USD/JPY to fresh monthly highs.
– Multi-week high near 158.00: A clear hurdle that, if taken out, confirms a longer-term bullish res
Explore this further here: USD/JPY trading.