Title: In-Depth Weekly Analysis of USD/JPY – Trend, Momentum, and Key Levels
Original Source: Action Forex (https://www.actionforex.com/technical-outlook/usdjpy-outlook/617660-usd-jpy-weekly-outlook-433/)
Credit: Action Forex Technical Team
Overview
USD/JPY experienced a notable retreat from its recent peak of 157.70 during the week, with the pair closing at 156.03. The downside movement may mark the beginning of a short-term consolidation phase. However, broader outlooks remain bullish, with strong underlying momentum intact. The pair continues to drive higher in the longer-term uptrend, with increased attention on upcoming resistance zones and potential intervention by Japan’s monetary authorities.
Short-Term Technical Outlook
The decline from the recent high may signal the start of a brief correction, particularly as the price dropped into the former consolidation range between 154.53 and 157.70. However, there’s no strong indication of a reversal yet.
Key observations include:
– USD/JPY broke below near-term support around 155.50 before stabilizing, reflecting a loss of bullish momentum.
– 155.50 has transitioned into a resistance level for the short term.
– A near-term bottom may be forming, with 154.53 acting as an initial support.
– RSI (Relative Strength Index) on the daily chart has slipped modestly from overbought conditions, reinforcing the possibility of a pause or a sideways pattern before the next move.
– Momentum indicators remain upwardly biased but are beginning to diverge — a signal of potential consolidation ahead.
Immediate support levels:
– 154.53: Prior resistance turned short-term support
– 153.59: Next significant level to watch
– 151.84: Lower support if broader bearish correction develops
Immediate resistance levels:
– 157.70: Recent peak serves as the key resistance zone; a break would signal a continuation of strong bullish momentum
– 160.00: Psychological level and a long-term Fibonacci projection target
Weekly Technical Analysis
From a weekly chart standpoint, USD/JPY continues to follow the trend higher, in line with its strong bullish trajectory since January 2024. The correction last week is modest when compared with the broader rally that was sparked from 140.25 in early January.
Key insights:
– There remains a notable bullish structure. The rally from 140.25 has been steady and well-supported with shallow pullbacks.
– The pair remains far above its 55-week EMA, which is currently at 146.85 — highlighting extended strength.
– A long-term resistance lies at the 160.02 Fibonacci projection, which is calculated based on the move from 127.20 to 151.89 and projected from the 140.25 retracement.
As long as 150.87 remains intact as a weekly structural low, the long-term trajectory remains upward. This zone may also act as a bullish floor if a broader pullback occurs in future sessions.
Notable resistance levels on the weekly chart:
– 157.70: Recent high
– 160.00 to 160.02: Fibonacci projection zone and psychological resistance
– 165.00: Further hypothetical target if momentum accelerates
Downside weekly supports:
– 153.59: Former high from April
– 150.87: Weekly swing low and key pivot
– 146.85: 55-week EMA
Fibonacci Structure
Utilizing Fibonacci analytic tools, a major target for bullish extension lies within the 160.00 to 160.02 area. This projection is significant as it combines both historical Fibonacci measures and recent swing highs.
Key Fibonacci relationships:
– The move from 127.20 (January 2023 low) to 151.89 (October 2023 high), followed by a retracement to 140.25 in January 2024, provides the core measurement framework.
Explore this further here: USD/JPY trading.