Title: USD/JPY Weekly Technical Outlook – Consolidation Phase Before Potential Movement
Original Author Credit: ActionForex.com
The USD/JPY currency pair saw a largely consolidative trading pattern over the past week, hovering just beneath recent multi-year highs. Despite the absence of aggressive momentum, the broader technical picture still supports the potential for another upward leg, contingent on a decisive breakout above key resistance levels. This report delves into the technical structure, trend dynamics, and forward-looking expectations for USD/JPY heading into the coming trading sessions.
Weekly Performance Summary
USD/JPY opened the week trading in proximity to the 151.00–152.00 range, which has served as a significant resistance corridor in recent months. While the pair showed occasional bullish pressure, it ultimately failed to achieve a clean breakout above this ceiling.
– The week’s range-bound behavior is widely seen as a pause in the overall bullish trend that has governed the pair throughout most of the year.
– Price action continued to stay above the key support level at 146.47, a prior low that provided strong buying interest during earlier corrections.
– Despite the relatively muted week, the prevailing technical bias remains in favor of the bulls, with indicators mildly favoring upside continuation.
Technical Indicators and Trend Dynamics
USD/JPY remains in a well-defined uptrend when measured over the medium- to long-term horizon. The structure of higher highs and higher lows remains intact, and price continues to operate above a rising long-term trendline that has acted as dynamic support since early 2023.
Key Technical Notes:
– Weekly RSI (Relative Strength Index): The RSI on the weekly chart continues to hover near overbought territory. Currently, it’s around the 70 mark. While this suggests some caution is warranted, it also indicates the strength of bullish sentiment.
– Moving Averages: The pair consistently trades above both the 50-week and 100-week simple moving averages (SMA), both of which are showing upward slopes—confirming the overall bullish trend.
– Price Structure: The failure to break decisively above 151.89 (November 2023 high) represents a significant ceiling. Bulls need to clear this level convincingly to resume the uptrend.
– Candlestick Behavior: Recent weekly candles indicate hesitation with long upper wicks, often suggesting profit-taking or bearish pressure at elevated levels.
Upside Scenario: Break Above Key Resistance
A clear and sustained break above the 151.89 resistance area would mark a pivotal moment for USD/JPY. It would confirm the continuation of the bullish trend and open the door for prices to move towards historical highs not seen in decades.
Potential Targets if Breakout Occurs:
– Immediate resistance lies at 152.00, a psychological level coinciding with previous interventions from Japanese authorities.
– Beyond that, focus shifts towards the 155.00 mark, a key historical resistance from June 1990.
– Additional bullish targets could extend to 160.35, representing the 38.2 percent Fibonacci projection from the 127.20 to 151.89 rally.
These bullish targets remain under provisional consideration until a firm breakout materializes on strong volume and positive momentum. Such a development would further validate the long-term uptrend and likely trigger renewed interest from large institutional players.
Downside Risk: Bearish Reversal or Consolidation Continuation
Despite the ongoing bullish narrative, attention must be paid to downside risk factors, especially if price fails to breach the 151.89 ceiling. Any pullback from resistance areas must be closely observed to gauge depth and structure.
Critical Support Zones:
– Immediate support lies at 146.47, the low from the previous major pullback. A break below this level would seriously challenge the bullish setup and signal the potential for a deeper correction.
– Secondary support is located at 140.24, aligning with the 61.8 percent Fibonacci retracement of the previous rally. This level would likely attract strong buying interest if tested
Explore this further here: USD/JPY trading.