USDJPY has lost its positive momentum after the impressive bullish rally towards the 20-year high of 129.40 on April 20, but today it is appearing positive again. In the short-term, the market could retain the negative momentum as the RSI dropped beneath the overbought region and the stochastic oscillator is approaching the oversold territory.
Should the pair stretch south, the 20-day simple moving average (SMA) at 125.75 could provide immediate support before the pair touches the 125.10 barrier. A significant step lower could bring the bearish sentiment into play, sending the price probably towards the 40-day SMA at 122.46. If the sell-off extends, attention could then turn to the 121.27 barrier, taken from the latest lows.
On the flip side, the multi-year high of 129.40 may halt upside movements as it did in the previous weeks, while more increases could meet the 130.00 psychological mark. More bullish actions could drive the market until the next resistance at 135.20, registered in January 2002.
In the medium-term picture, USDJPY has been trading bullish in the past six months after the close above 112.40. If there is also a climb beyond the 130.00 round number, this would endorse the strong positive outlook.
