Title: USD/JPY Daily Outlook – Technical Analysis and Market Sentiment Overview
Source: Adapted from ActionForex.com by ActionForex Staff
Original Author: ActionForex Staff
Original Article: https://www.actionforex.com/technical-outlook/usdjpy-outlook/613947-usd-jpy-daily-outlook-2239/
The USD/JPY pair continues to command trader attention amid evolving global macroeconomic dynamics, particularly the diverging policy paths of the Federal Reserve and the Bank of Japan. In this analysis, we delve into the technical outlook for USD/JPY as daily metrics guide the future trajectory. Borrowing insights from ActionForex.com and supplementing with broader market interpretations, this write-up offers a multi-angle view of the currency pair.
Current Market Overview
The USD/JPY currency pair began the day trading with moderate traction as upward momentum continued within a consolidative range. The pair is sustaining position on bullish technical footing, hovering closely under multi-month highs.
As per the latest update, short-term price action remains positive, looking to extend the strong trend intact since the start of the year. This uptrend has been bolstered by:
– Diverging monetary policies: While the Federal Reserve has maintained a hawkish tone through higher interest rates to contain inflation, the Bank of Japan continues with a relatively dovish stance, keeping its benchmark interest rate close to zero.
– Strong US economic data: Economic indicators such as robust employment figures, higher-than-expected CPI numbers, and resilient GDP growth have supported the dollar.
– Yield differentials: U.S. Treasury yields trading significantly higher than their Japanese government bond counterparts continue to lift USD/JPY.
Short-Term Price Action
According to the analysis provided by ActionForex, USD/JPY maintains a minor bullish bias, with room to test the 151.89 level. That mark represents a recent high and acts as the immediate resistance target. Price action seems constrained within a near-term upward channel, showing consistency in both higher highs and higher lows.
Key Technical Highlights
– Intraday bias remains neutral for now due to range-bound movement, although an upward momentum bias is evident on the 4-hour chart.
– A decisive break above 151.89 would confirm reacceleration of the bullish trend from the recent low around 140.25.
– On the downside, break of the 149.18 support is needed to indicate short-term topping. Without that move, further gains remain more favorable than not.
Technical Indicators
A comprehensive view of the primary technical indicators on daily and 4-hour timeframes provides deeper insights:
1. MACD (Moving Average Convergence Divergence)
– The MACD remains slightly tilted positive on the daily chart, indicating room for further upside.
– No negative divergence evident, which affirms the current upward strength.
2. RSI (Relative Strength Index)
– RSI hovers around 60 on the daily timeframe, a zone supportive of bullish continuation but far from overbought conditions.
– A rise above 70 would indicate overbought levels, suggesting some exhaustion may be imminent upon any test of 151.89 or beyond.
3. Moving Averages
– Price trades above its 20-day, 50-day, and 100-day EMAs on both daily and hourly charts, a clear sign of bullish structure.
– The 20-day EMA acts as dynamic support, currently positioned around 149.60. A decisive break below this level would indicate some short-term weakness.
4. Trendlines and Channels
– A well-defined ascending channel continues to contain the recent price action.
– The lower bound of the channel offers dynamic support around 149.40–149.60 while the upper channel line could face resistance closer to 152.50.
Fundamental Drivers
The longer-term outlook for the USD/JPY pair remains supported by core monetary and geopolitical themes. These key factors are instrumental in guiding both investor sentiment and speculative positioning:
–
Explore this further here: USD/JPY trading.