USDJPY is moving sideways within a tight range of the 134.25 support and the 24-year high of 137.05, failing to post a higher high, suggesting an overbought market.
The RSI indicator is pointing down in the positive region, while the MACD oscillator is holding below its trigger line above the zero level, indicating a weak momentum. In trend indicators, the 20-day simple moving average (SMA) is turning lower, while the 40-day SMA is still following the medium-term uptrend line.
Further declines may meet support around the lower boundary of the channel, before tumbling to the ascending trend line around 133.00 and the 40-day SMA at 132.10. Not far below, support could occur around the 131.35 barrier ahead of the 126.30 level.
On the upside, resistance could come from the 24-year high of 137.05 Â before rallying towards the 140.00 psychological level. Higher still, the 146.83 resistance, taken from August 1998 would increasingly come into scope.
The medium-term picture continues to look predominantly bullish, with trading activity taking place above the short-term SMAs and the 200-day SMA. However, the short-term outlook appears overstretched.
