Title: In-Depth Mid-Day Technical Analysis of USD/JPY
Original article by ActionForex.com. This rewritten and expanded analysis provides a comprehensive exploration of the USD/JPY pair based on mid-day trading behavior, highlighting technical levels, trends, and the broader market picture. Readers should consider the original article by ActionForex as the primary source for this outlook.
Overview of USD/JPY Mid-Day Movement
As of the latest trading update, USD/JPY remains in a consolidation pattern following a recent retreat from short-term resistance. The pair has pulled back slightly but overall momentum on the upside remains intact. With the US Dollar maintaining underlying strength and Yen weakness persisting due to ongoing monetary divergence between the Federal Reserve and the Bank of Japan, upward bias remains despite near-term corrections.
Key Takeaways
– USD/JPY is currently trading below the recent high of 157.70
– The pair is contained above initial support levels, suggesting consolidation rather than a reversal
– The broader trend remains bullish until key support zones are decisively breached
– Upward movement could resume if current consolidation zones hold
Technical Analysis: Immediate Outlook
The near-term picture shows a pause in upward momentum after an impressive bullish run. However, the stall is seen more as a consolidation phase than the beginning of a deep pullback.
Support and Resistance Levels:
– Immediate resistance: 157.70, the recent high reached earlier this week
– Minor near-term support: 156.06, a short-term pivot established in recent daily trading
– Deeper support level: 154.54, a previous swing low and the last structural higher low on the H4 timeframe
Price action hasn’t broken below critical support, meaning the structure of the current uptrend remains valid. As long as the price holds above 154.54, bulls are likely to seek re-entry opportunities around lower support levels for continuation trades targeting a break above 157.70.
Intraday Positioning and Momentum Indicators
Market internals show a momentary loss of buying pressure, but there is no conclusive sign of trend reversal.
Momentum indicators show:
– Relative Strength Index (RSI) is near the 60 mark on the 4-hour chart, indicating that bullish momentum lingers but is taking a pause
– Moving Average Convergence Divergence (MACD) is aligning closer to the signal line, hinting at possible sideways action or mild correction before a fresh leg higher
– The pair remains above its 20-period and 50-period EMAs on the hourly and 4-hour charts, showcasing trend support
Technical projections based on Fibonacci ratios from the last meaningful swing suggest the next upward extension target lies near 159.30 if 157.70 is decisively breached.
Trend Structure and Chart Patterns
From a structural perspective, USD/JPY maintains a higher-high and higher-low pattern on the 4-hour and daily timeframes. Trendline support drawn from recent swing lows supports the view that the current pullback is corrective.
Price structure suggests a potential bullish continuation pattern is forming:
– The pullback initiated at 157.70 failed to gather wide sell-side traction, and volume indicators also suggest weakening selling pressure
– The pattern could be building into a bullish pennant or flag, which are typically continuation formations
– A breakout above the upper trendline (above 157.70 area) could trigger a buying wave, with initial targets around 159.30 and longer-term objectives at 160.85
Broader Daily Chart Perspective
Looking at the daily timeframe, USD/JPY remains solidly bullish. Although minor pullbacks are visible, the broader path is higher.
Key Observations on the Daily Chart:
– USD/JPY has consistently been above the 50-day SMA since late February
– The Bollinger Band top is currently expanding, showing volatility is increasing in line with the bullish movement, allowing room for re-tests of recent highs
– RSI has not diverged negatively from price, a signal
Explore this further here: USD/JPY trading.