USDJPY has been trading within an upward sloping channel since mid-March, crossing above crucial technical levels and posting consecutive higher highs. However, the pair has been trading sideways in the past few sessions after its advance got rejected in the upper end of the bullish pattern.
The momentum indicators currently suggest that buying forces are subsiding. Specifically, the RSI is ticking downwards but remains above its 50-neutral mark, while the MACD dropped beneath its red signal line in the positive territory.
Should buyers try to push the price higher, initial resistance could be met at the six-month high of 140.90. Violating that zone, the pair could ascend towards the November 2022 resistance of 142.24 or higher to test the September peak of 145.89. Failing to halt there, the 148.80 hurdle could cap the pair’s upside.
Alternatively, should the uptrend lose steam and the price reverse lower, the recent support of 138.42 could act as the first line of defense. If that floor collapses, the bears might aim for the March high of 137.90 before the spotlight turns to 135.31. Further declines could then cease at the 133.00 support territory.
Overall, USDJPY seems to be experiencing a consolidation period after its latest advance got rejected, but the pair remains stuck within its medium-term ascending channel. Therefore, unless the bullish pattern gets violated to the downside, the uptrend will most likely resume.
