Based on the article “USD/JPY Weekly Outlook” by ActionForex, the current and projected USD/JPY price movements reflect the broader macroeconomic environment and ongoing central bank dynamics. This rewritten version expands on the analysis, diving deeper into the weekly technical outlook for the currency pair while maintaining the core perspectives provided by ActionForex. This version also uses bullet points for clarity and offers a comprehensive interpretation of the pair’s potential direction. Sourced from ActionForex (original article by ActionForex’s editorial team).
USD/JPY Weekly Outlook – Extended Analysis
Overview
In the previous trading sessions, USD/JPY remained firmly within a consolidation range, reflecting investor indecision and the balancing forces between interest rate expectations from the Federal Reserve and the Bank of Japan’s relatively dovish stance. Short-term price action continues to revolve around significant technical levels, and traders are closely monitoring whether the dollar can resume its broader uptrend or if a deeper correction looms ahead.
Last week, the pair initially attempted a push higher but met resistance and retraced some gains. This behavior underscores the importance of the resistance levels in play and hints that bulls may be running out of momentum. Nevertheless, structural support remains intact, and the pair stays within its medium- to long-term bullish channel.
Technical Analysis
Current Price: USD/JPY currently trades near the 151.80 resistance level, with momentum suggesting potential further upside if certain conditions are met.
Support and Resistance Levels:
– Immediate resistance stands at 151.89, which represents the recent high reached earlier.
– A firm break above this level would likely open the way toward 153.98, which was the multi-decade high set in 2022.
– Minor support lies at 150.00, a psychological threshold that will likely see buying interest.
– Key dynamic support continues around 148.79, which is the 55-day exponential moving average, important as a median trend pivot.
– Deeper support rests at 146.47, which aligns with prior consolidation levels and acted as a base in mid-March.
Momentum and Indicators:
– Daily MACD: Remains above the signal line, maintaining bullish bias, but the divergence is narrowing, indicating waning momentum.
– RSI (Relative Strength Index) hovers near 70 on the daily chart, suggesting overbought conditions but not yet at reversal territory.
– 20-day and 55-day EMA: Price remains above both major moving averages, reinforcing the bullish trend framework.
Trend Structure and Price Formation
The broader structure still aligns with an upward trend, though recent candles point to near-term consolidation. The sideways action since late March could be forming a base for the next directional move.
– Uptrend Support: The longer-term trendline from the low at 138.05 set in January 2024 continues to guide buyer participation. Unless this trendline is broken decisively, bullish bias will likely remain.
– Pattern Observation: The price behavior potentially forms a bull flag pattern, which, if resolved to the upside, projects a target beyond the 2022 high of 153.98.
Weekly Perspective
From a longer-term weekly perspective, USD/JPY remains comfortably within an established up-channel that began in early 2023. The pair is now retesting the upper bound, suggesting either a breakout or another potential resistance-induced pullback.
– Upper Channel Resistance: Around the 152-153 zone. Weekly candle closes above this level would create room for extended bullish aspiration.
– Middle Channel Support: Located around 145, any decline toward this level will be watched for accumulative buying.
– Weekly RSI: Approaches overbought territory but historically has sustained strength above 70 during strong bullish runs.
Fundamental Drivers
While technicals provide trading levels and bias signals, the macroeconomic landscape defines longer-term conviction.
Dollar Side:
– US economic data continues to support a longer “higher for longer” interest rate narrative.
– Key support comes from strong labor market data, persistent inflation indicators
Explore this further here: USD/JPY trading.