Sat, Feb 04, 2023 @ 12:32 GMT
HomeContributorsTechnical AnalysisUSDJPY Rises, But Outlook Still Cloudy

USDJPY Rises, But Outlook Still Cloudy

USDJPY is set for another green day, being halfway below last week’s pre-crash levels at 133.80.

The price has been gradually gaining ground over the past couple of sessions, with the RSI and the stochastics endorsing the improvement in sentiment as the indicators changed direction to the upside. That said, the crucial resistance trendline drawn from October’s peak is coming again on the radar, threatening a new bearish episode near the 20-day simple moving average (SMA) at 135.40. The 200-day SMA could prove another headwind slightly higher at 136.00.

Should the bulls drive even higher, the next challenge may occur around the 38.2% Fibonacci retracement of the March-October uptrend at 137.70, where the lower boundary of the broken bearish channel is positioned. Another victory here may attract fresh buying interest, lifting the pair up to the 50-day SMA, which is currently converging towards the 140.00 number.

In the event the price closes below the 50% Fibonacci of 133.30, all eyes will turn again to the 131.70-130.50 support area. Sliding lower, some consolidation may develop near the 129.50 handle before an aggressive sell-off squeezes the price towards the 61.8% Fibonacci of 126.50.

In short, the latest pickup in USDJPY looks untrustworthy as downside risks keep lingering overhead within the 135.40-136.00 region.

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