USD/JPY Outlook: Bulls Hold Ground Amid Market Uncertainty — Key Support and Resistance Insights

Title: In-Depth Analysis of USD/JPY Daily Outlook
Source: ActionForex.com
Original Author: ActionForex Analyst Team
Original Article: [ActionForex USD/JPY Daily Outlook](https://www.actionforex.com/technical-outlook/usdjpy-outlook/616512-usd-jpy-daily-outlook-2255/)

The USD/JPY exchange rate displayed marginal movements in the most recent trading session, reflecting the continuing uncertainty within the currency markets. As per the latest updates from ActionForex, a mild retreat was recorded after the pair touched a temporary high close to 157.70. However, signs indicate that the upside trend remains intact for now.

This detailed breakdown aims to expand on the insights presented in the original article, offering a thorough analysis of USD/JPY’s technical and fundamental outlook, the broader market implications, and key indicators traders should monitor in the near and medium-term outlook.

Summary of Current Market Conditions:

– USD/JPY is poised within an upward channel and shows continued bullish sentiment, although momentum could be capped in the short term.
– Resistance near the 158.00 psychological handle provides a crucial benchmark for assessing market reactions.
– The Bank of Japan’s monetary stance and U.S. interest rate expectations are key drivers to watch.

Price Action Overview:

The pair pulled back slightly from the recent high of 157.70 but remains well-supported above key short-term moving averages. The structure suggests the price action is locked in a consolidation phase within the overall bullish trend.

– Temporary top was formed at 157.70 as per recent daily chart indications.
– Price has retreated slightly but remains above critical support zones.
– The decline is seen as a correction rather than a trend reversal.

Immediate Technical Support and Resistance Levels:

Support:
– Minor support is observed around 156.55, which aligns with the 10-day moving average.
– Stronger support lies at 155.72, representing the previous low on the retracement.
– A breach of 155.72 would indicate a more significant short-term bearish corrective wave developing.

Resistance:
– Immediate resistance is at 157.70, the local high from the recent price action.
– Topping above 158.00 would imply strong bullish continuation and possibly open upside potential toward the 160.00 historical level.
– Further resistance could emerge closer to 161.00 if the bullish trend accelerates over the coming trade sessions.

Trend and Momentum Patterns:

The continued higher-high, higher-low structure supports the notion that the pair retains upside momentum. However, some signs of consolidation are visible, and oscillators such as RSI and MACD could begin to show divergences if the upward strength weakens or flattens.

– The RSI (Relative Strength Index) is hovering close to overbought territory near 70, typically a level that causes traders to pause or take profit.
– MACD (Moving Average Convergence Divergence) lines remain in bullish formation, though histogram bars are beginning to taper off, suggesting waning momentum.

Implications of the Support and Resistance Zones:

A break below 155.72 would likely trigger a deeper intraday correction. In that scenario, the small rally from 151.86 (recorded May low) would be taken as a three-wave corrective move (A-B-C pattern), potentially signaling a reversal or deeper retracement.

– A downside break marks the completion of the rally and could open space for moves toward the 154.50 and 153.20 levels.
– However, maintaining above the 156.50–155.72 support zone will reinforce bullish bias and could trigger a new wave higher.

Fundamental Drivers Behind USD/JPY Movements:

The USD/JPY pair’s direction continues to be influenced heavily by policy divergences between the Federal Reserve and the Bank of Japan.

Key factors to monitor:

1. U.S. Federal Reserve Policy:
– Expectations for potential interest rate cuts later in the year are

Explore this further here: USD/JPY trading.

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