USDJPY has been trending downwards after peaking at the 20-year high of 131.34 in early May. Nevertheless, in the past few four-hour sessions, the pair has managed to halt its decline and is currently moving sideways.
The momentum indicators also suggest that negative momentum is cooling off. Specifically, the MACD histogram has jumped above its red signal line but remains in the negative territory, while the RSI is ticking upwards beneath its 50-neutral threshold.
Should positive momentum intensify, the pair could encounter strong resistance at the 128.29 region, which is the upper boundary of its recent sideways pattern. Piercing through this region, the price advance could then stall at the 128.93 before 129.77 appears on the radar. Higher up, the 130.80 barrier may prove to be a tough obstacle for the bulls.
Alternatively, bearish action could send the price to initially test the 127.51 hurdle. Should that floor collapse, the spotlight might turn to the 127.00 psychological mark. Divining below this level, the price could descend towards 126.22 or lower to challenge the 125.08 barricade.
Overall, USDJPY appears to be on a consolidation phase since its downtrend failed to push lower. Therefore, a jump above the 128.29 ceiling might turn the short-term picture back to positive.
