Title: In-Depth Weekly Technical Analysis of USD/JPY — Adapted from ActionForex (Original Author: ActionForex.com)
Overview
The USD/JPY currency pair demonstrated a strong performance last week, continuing to press higher within its medium-term uptrend. While short-term fluctuations provided minor pullbacks, the broader momentum and structural dynamics suggest that the pair retains a bullish bias—especially amid diverging monetary policy posture between the US Federal Reserve and the Bank of Japan (BoJ).
In this comprehensive weekly outlook, adapted and expanded from ActionForex’s original analysis, we’ll delve into key technical levels, market structure, and the macroeconomic context shaping the future direction of USD/JPY. This detailed assessment seeks to offer a more granular technical perspective supported by trend indicators, momentum tools, and broader economic conditions.
Weekly Recap
– USD/JPY maintained an upward trajectory, closing the week around the 156.80 level, exhibiting notable resilience despite signs of potential exhaustion.
– The pair tested and bounced off the ascending trend line support that has been in play since March 2024.
– Repeated tests of resistance near the psychological 158.00 area failed to trigger significant bearish reversals.
– Recurrent intervention concerns from Japanese authorities kept speculative price action somewhat contained through cautious positioning by traders.
– Yields on the US 10-year Treasury remained elevated, adding further support to the greenback versus the yen.
Technical Structure
Daily Chart Analysis:
– From a structural standpoint, the upward channel defined since January 2024 remains intact.
– The 50-day Simple Moving Average (SMA), currently near 153.20, offers dynamic support and aligns with the channel’s midline.
– More definitively, price remains above the 200-day SMA, cementing a longer-term bullish bias.
– An ascending trendline drawn from the March low around 146.50 continues to attract bids on pullbacks.
Key Fibonacci Levels:
– Measured from the March low (146.50) to the May high (158.00), the 38.2% Fibonacci retracement rests near 153.50, with the 50% level around 152.25.
– These zones are likely to act as support, particularly in a corrective pullback scenario.
– On the upside, the 161.8% Fibonacci extension project from a prior mini pullback sets a potential target near 160.00.
Momentum Indicators
Relative Strength Index (RSI):
– The daily RSI has stayed mostly above 60 for the past two weeks, indicating bullish momentum.
– A reading near 70 shows the pair is edging toward overbought territory, suggesting risk of short-term consolidation or pause.
Moving Average Convergence Divergence (MACD):
– The MACD histogram continues to hover in positive territory.
– The signal line and MACD line are both above zero, supporting the strength of the current trend.
Slow Stochastic Oscillator:
– In the overbought zone, with potential for a crossover that may signal shorter-term pullback risk.
– Monitoring for divergence in price action and oscillator behavior is advised.
Weekly Chart Perspective
– On the weekly timeframe, the bullish momentum appears entrenched.
– Price has not closed below the 10-week SMA since late March 2024.
– The weekly RSI is also elevated but not in extreme overbought levels, which implies more upside room provided macro conditions remain supportive.
Support and Resistance Levels
Immediate Support:
– 156.00: Psychological and minor intraday support that has been tested several times without major breach.
– 154.50: Minor support zone with historical price memory.
– 153.50: 38.2% Fibonacci retracement of the March-May rally, also aligned with the 50-day SMA.
Stronger Support Areas:
– 152.00–152.50: 50% retracement zone where price consolidated in April before the breakout.
– 150.75: A key horizontal
Explore this further here: USD/JPY trading.