This is a rewritten version of the Forex technical analysis article “USD/JPY Mid-Day Outlook” from ActionForex.com, originally authored by ActionForex in May 2024. All credit for the original analysis and insights goes to the ActionForex team.
Title: In-Depth Technical Review of USD/JPY – Mid-Day Analysis
Overview
The USD/JPY currency pair is currently showing bullish momentum, with market indicators pointing to continued upward pressure during the mid-day trading session. As of the latest data, USD/JPY continues the current rebound from short-term lows and is threatening to retest a previous local high. With the pair moving strongly during the Asian and early European sessions, investors are closely watching key resistance and support levels to determine the next possible breakout or reversal.
This analysis aims to provide a more detailed look into the technical developments surrounding USD/JPY, incorporating updated chart trends and indicator insights based on the original ActionForex mid-day outlook, while expanding the context for deeper trader decision making.
Price Action and Trend Summary
– USD/JPY has resumed its recent recovery trajectory following a short-term corrective pullback that failed to break key support.
– The intraday bias remains on the upside, with strong momentum suggesting that further gains are possible if the pair overcomes nearby resistance levels.
– On a broader trend perspective, USD/JPY continues to operate within an overall uptrend channel, underpinned by supportive monetary policy divergence between the Federal Reserve and Bank of Japan.
Key Technical Levels
Immediate Resistance:
– 157.70: The level to watch as near-term resistance. A solid break above this barrier would likely confirm the continuation of the bullish trend, potentially targeting higher resistance seen in historical chart data.
– 160.20: A crucial long-term Fibonacci projection level that aligns with historical price action, offering the next major upside target if the bullish scenario unfolds.
Immediate Support:
– 154.52: This marks the low of the latest corrective dip and acts as the near-term support level. Staying above this threshold keeps the bullish case intact.
– 151.86: A more significant support, previously tested and respected multiple times. A close below this area might initiate a deeper corrective phase toward lower price territory.
Indicators and Technical Signals
– Moving Averages:
– The 20-day Exponential Moving Average (EMA) continues to trend upward, providing dynamic support in the short term.
– The 50-day EMA also points upward, suggesting medium-term bullish alignment is intact.
– Price currently sits above both the 20- and 50-day EMAs, further confirming bullish acceleration.
– Relative Strength Index (RSI):
– RSI is currently trading above the 60 level, indicating momentum remains in favor of the bulls.
– No signs of bearish divergence on the daily or 4-hour chart, adding confidence to the current breakout attempt.
– MACD (Moving Average Convergence Divergence):
– MACD remains in positive territory with the signal line well below the histogram, supporting continuation of upward pressure.
– Recent histogram expansion suggests building trend strength.
– Bollinger Bands:
– Price is testing the upper band, indicating overbought conditions might be near; however, consistent band walking suggests a strong trend rather than imminent reversal.
Scenario Outlook Based on Price Action
Bullish Scenario:
– A decisive break above 157.70 would confirm the resumption of the larger uptrend, exposing the pair to the next major resistance zone around 160.20.
– Momentum and trend indicators support this case, especially given the underlying divergence in monetary policy between Japan’s ultraloose stance and the Federal Reserve’s tighter posture.
– Positive U.S. data releases or unexpected dovish cues from the BoJ may provide the fundamental spark needed to sustain bullish acceleration.
Bearish Scenario (Short-Term Correction):
– Failure to break above 157.70 could trigger a minor correction, with the first downside target at 154.52.
– A break below
Explore this further here: USD/JPY trading.