USD/JPY Weekly Technical Outlook – Adapted and Expanded from Action Forex
Original Author: ActionForex.com
Overview
The USD/JPY currency pair remained largely stable over the past week, hovering around critical technical levels. Price movements continued to reflect underlying confidence in the strength of the US dollar, driven in part by diverging US and Japanese monetary policies. Market participants continue to monitor central bank rhetoric, yield differentials, and risk sentiment as primary drivers for this major currency pair.
While recent interventions by Japanese authorities injected short-term volatility, their long-term impact appears limited. The pair remains in a broad uptrend, although a minor consolidation has started to take shape. Traders should note the importance of the current consolidation phase, which may resolve into either a continuation or reversal depending on key technical breakpoints and macroeconomic catalysts.
Weekly Performance Review
The USD/JPY pair traded broadly sideways throughout the past week, closing with minimal net change. Price action suggests a lack of decisive momentum in either direction, with buyers and sellers locked in a temporary standoff.
Highlights:
– The pair exhibited a tight trading range, with neither bulls nor bears managing a decisive breakout.
– Market participants continued to digest recent commentary from the Federal Reserve and the Bank of Japan (BoJ).
– Risk appetite across global markets remained sensitive to evolving inflation expectations and central bank guidance.
Technical View – Daily Chart
On the daily chart, USD/JPY remains in a consolidation phase below key resistance. Price action continues to suggest a correction from the previous uptrend remains underway, but without strong bearish conviction. Declining momentum and a potential loss of upside pressure add weight to a cautious near-term outlook.
– Resistance: The recent swing high at 157.70 remains an important resistance level. A firm move above this threshold will likely reignite bullish momentum.
– Support: Strong support lies around the 153.60 level, formed by the intersection of horizontal support and the lower boundary of the short-term consolidation range.
– Indicators: Daily RSI has dipped below overbought territory but remains above 50, indicating some upside bias is still in play. MACD lines are trending sideways, signaling waning momentum.
Technical View – Weekly Chart
On a broader time scale, the weekly chart preserves the underlying bullish structure. The pair is consolidating within an established uptrend, and unless support breaks, the overall bias remains bullish. That being said, the possibility of a deeper correction cannot be ruled out if downside levels are breached.
– Trend: Weekly candles continue to hold well above the 55-week EMA, signaling sustained bullish pressure.
– Key Support Zone: The region between 150.00 and 151.90 represents a pivotal support area. A decisive breakdown below this level would shift the outlook to more neutral or bearish.
– Key Resistance Zone: The recent 157.70 high remains the primary upside target. A weekly close above this level could signal renewed upward momentum with next targets around the 160.00 psychological level.
– RSI and Momentum: Weekly RSI remains within the bullish territory. No divergence is yet present, keeping the longer-term uptrend intact.
Outlook
In the near term, USD/JPY appears to be entering a phase of consolidation within a broader uptrend. The underlying bias remains tilted to the upside as long as the pair holds above the key support region near 151.90. A break above current resistance at 157.70 is needed to confirm the next bullish leg.
Short-Term Bias:
– Neutral to mildly bullish, as long as 151.90 support holds.
– Near-term resistance stands at 157.70; a break above would open the door to 160.00 and beyond.
Medium-Term Bias:
– Bullish, supported by weekly trend and fundamental divergence in monetary policy.
– Targeting eventual extension to 170.00, assuming a break above 160.00, barring any meaningful interventions from Japanese authorities.
Long-Term Outlook
From a long-term perspective, the USD
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