HomeContributorsTechnical AnalysisUSDJPY: Samurai Weighing the Next Move

USDJPY: Samurai Weighing the Next Move

USDJPY is bouncing back after five trading sessions where it fell by a cumulative 2.5%. On daily timeframes, the pair’s subsequent move after the pause allows us to determine further medium-term trends.

The weakening of the dollar accompanied the pair’s decline since the end of last month, but it can also be seen as a correction from the late December lows at 140.3 to last month’s peaks at 150.8. Buying in the pair came at the 61.8% level, emphasising the classic Fibonacci pattern.

USDJPY also approached the 200-day moving average, which has acted as a support level since mid-2023.

The yen is likely to go into consolidation for a week, freezing up until the Bank of Japan’s decision next Tuesday. This is also a sufficient interval for market forces to build up enough liquidity to make a decisive move in one direction or another.

Potentially, a failure of USDJPY below 146 would signal a victory for the Bears, making us expect the next consolidation no earlier than 140-141.

On the contrary, the ability to get back above 148, where the 50-day moving average is located, would be an early signal of the pair’s resumption of growth with the first potential target at 150.8.

FxPro is an award-winning online broker offering Contracts for Difference (CFDs) on forex, futures, spot indices, shares, spot metals and spot energies. FxPro serves clients in over 150 countries worldwide and offers multilingual customer support 24/5. Trading CFDs involves significant risk of loss.

Featured Analysis

Learn Forex Trading