This article is a rewritten and expanded version of the original technical analysis piece titled “USD/JPY Mid-Day Outlook” from ActionForex.com. Credit goes to the original author published on ActionForex at https://www.actionforex.com/technical-outlook/usdjpy-outlook/610479-usd-jpy-mid-day-outlook-2150/.
Rewritten and expanded for educational and informational purposes:
US DOLLAR/JAPANESE YEN (USD/JPY) TECHNICAL ANALYSIS MID-DAY OUTLOOK
The USD/JPY currency pair has shown signs of stabilizing during the current session, recovering from earlier losses after bouncing back above the 157.00 handle. The resilience of the US dollar against the Japanese yen remains a key theme in today’s trading, especially as market participants continue to track the yield differentials between the two countries and monitor central bank commentary.
USD/JPY SHORT-TERM TECHNICAL OUTLOOK
The immediate outlook for USD/JPY remains cautiously bullish in tone, although traders should be aware of several technical signals that hint at trend uncertainty in the near term.
Key technical observations include:
– The pair found initial support near the 156.58 level, which acted as a temporary floor in the previous session.
– A modest rebound was observed since that low, lifting the pair back to test the 157.20 region.
– However, there remains no significant bullish follow-through, and as such, the current rebound is viewed as corrective in nature.
– Persistent selling pressure near the recent highs around 158.00 may cap further upside for now.
Technical indicators suggest a mixed picture:
– The 4-hour Relative Strength Index (RSI) has stabilized near the neutral 50 level, indicating indecision.
– Momentum indicators remain muted and insufficient to confirm a strong immediate rally.
– Price action has violated a minor ascending trendline support near 156.70, signaling possible weakening of bullish momentum.
TRADING BIAS REMAINS NEUTRAL TO SLIGHTLY BEARISH IN THE SHORT TERM
Given the limited upward traction above 157.00 and continued hesitation below key resistance at 158.25, the short-term bias is currently viewed as neutral to slightly bearish.
As long as resistance holds firmly at 158.25 and the recent swing low at 156.58 stays intact, traders are advised to monitor for a potential range-bound configuration defined by:
– Resistance zone: 158.00 to 158.25
– Support zone: 156.50 to 156.00
A breakout beyond these critical levels would likely provide clearer directional insights.
POTENTIAL SCENARIOS FOR USD/JPY MOVEMENT
Scenario 1: Bullish Continuation
– A sustained break above 158.25 would likely revive bullish momentum and open the pathway for a test of 160.16, which marks the high from April.
– Breaking above this zone could set the pace for a move toward the psychological threshold of 162.00, assuming supportive macro conditions.
Scenario 2: Downside Correction Resumes
– Failure to hold above 156.50 open doors for another leg downward to test the 155.00 zone.
– A decisive breach below the 155.00 level would confirm near-term topping behavior and could turn the outlook bearish, targeting 152.80 and maybe even 150.00, depending on further macroeconomic catalysts.
The following chart zones are worth watching for traders and investors:
Support Levels:
– 156.50 – Near-term support aligned with prior lows
– 155.00 – Psychological and technical round-number barrier
– 152.80 – March consolidation zone
– 150.00 – Key psychological support level
Resistance Levels:
– 158.25 – Recent cap level for upside momentum
– 160.16 – April’s multi-decade high for USD/JPY
– 162.00 – Potential upside if bullish breakout materializes
FUNDAMENT
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