USD/JPY Mid-Day Technical Outlook (Adapted from ActionForex.com Analysis)
Original Author: ActionForex.com
As of the latest market movements on USD/JPY, price action has shown noteworthy developments that could shape the near-term direction of the pair. The current pattern and key technical levels suggest that bullish momentum may be resuming, supported by recent rebounds from previous lows and confirmations across multiple time frames.
Intraday Movement and Near-Term Analysis
USD/JPY trades notably higher today, with price rebounding from key support and pushing through resistance levels that had previously capped upside potential. The strength of this recovery is reinforcing the broader bullish trend that has characterized recent months.
Key points on intraday movement:
– The intraday bias is currently tilted towards the upside, reflecting ongoing buying interest after a recent corrective retreat.
– A brief dip was contained at 153.59, a level that now serves as key short-term support.
– With this support holding firm, buyers stepped in to push USD/JPY to the 156.00 region, aligning with resistance formed earlier in May.
– Momentum indicators, including moving average convergence divergence (MACD) and relative strength index (RSI), are aligning with this bullish push, hinting at further upside potential.
To confirm the continuation of the medium-term uptrend, traders are watching for a decisive break of 156.78, which marks the intra-day high reached earlier this month. A sustained move above this level would provide technical validation for further bullish extension.
Outlook for Short-Term Price Action
A continuation of the upward rebound would open the door towards retesting the next resistance level near the April high of 160.20. This would represent a significant challenge for buyers, but if breached, could signal a resumption of the long-term uptrend seen over the past year.
Traders should consider the following technical levels as potential triggers or signal points:
– Immediate resistance is at 156.78 (May high).
– Further resistance lies at 160.20 (April high), a psychological and structural barrier.
– Immediate support is at 153.59, which should be watched as a pivot point in case of renewed bearish pressure.
– Below that, the next notable support lies at 151.86, with critical support at the 151.86–150.00 range.
Medium-Term Trend Remains Strong
Zooming out to a broader time frame, the structure of the uptrend remains intact. The pair continues to trade above both the 55-day and 200-day exponential moving averages (EMAs), which are sloping upward. This configuration underscores the ongoing bullish pressure in the market.
Key insights on the medium-term outlook:
– The correction from 160.20 to 151.86 appears to have completed, forming a temporary bottoming pattern.
– With this low in place and successive higher lows forming in the recent weeks, bullish structure maintains its dominance.
– Price continues to find support at dynamic levels such as the 55-day EMA, which minimizes the likelihood of a deep correction.
– Bigger trendlines from 2023 remain intact, further supporting buyer interest on pullbacks.
Given these factors, a clear break above 156.78 would not only confirm short-term strength but also suggest that the pair is on track for a test of multi-decade highs near 160.20. If this level is breached, it could unlock a further rally towards the higher Fibonacci projections around 162.50 and even 165.00 over the medium term.
Fundamental Drivers Behind the Technical Picture
While this analysis focuses on technical patterns, it’s essential to keep in mind the fundamental backdrop that influences USD/JPY. The divergence between the Bank of Japan’s ultra-loose monetary policy and the Federal Reserve’s restrictive stance remains one of the primary drivers for USD/JPY strength.
Highlights influencing fundamentals include:
– The Federal Reserve’s rate path remains on the hawkish side compared to global peers, especially the Bank of Japan.
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