USDJPY is holding above the key 137.90 level and the 200-day simple moving average (SMA), suggesting that more bullish actions could come within the short-term upward sloping channel.
However, the technical oscillators are showing some weakness as the RSI is pointing down, failing to jump above the 70 level and the stochastic oscillator is flattening in the overbought region, indicating an overstretched market. In trend indicators, the bullish crossover within the 20- and the 50-day SMAs remains in place.
Should USDJPY make another run higher, it’s likely to meet resistance at the 50.0% Fibonacci retracement level of the downward wave from 151.90 to 127.25 at 139.60. A successful break above this resistance area would open the way for the 142.25 barrier and the 61.8% Fibonacci at 142.50.
If the soft positive momentum fails to hold and prices turn lower, the 137.90 level and the 200-day SMA at 137.20 are the nearest supports that could halt steeper declines. A potentially important support, though, is the 38.2% Fibonacci at 136.66 as well as the short-term SMAs at 136.20 and 134.85. If breached, it would shift the focus to the downside and prices would slip towards the 23.6% Fibonacci of 132.95.
In the bigger picture, USDJPY would need to make a sustained climb above the 50.0% Fibonacci of 139.60 in order for the outlook to become convincingly bullish.