Bullish Momentum in USDJPY Remains Strong Post Consolidation
Following a robust rally over the past couple of weeks, the USDJPY pair is currently undergoing a period of consolidation just below critical resistance levels at 150.90/94, corresponding to the highs of 2023/22.
The surge in USDJPY can be attributed to the considerable interest rate differential between the United States and Japan. Despite the Bank of Japan’s recent rate hike, market sentiment suggests a lack of enthusiasm for aggressive policy tightening measures from the central bank.
However, investors are treading cautiously in light of recent warnings from Japanese officials regarding the perceived weakness of the yen. This cautious approach leaves the possibility of intervention by authorities on the table.
Analyzing the technical indicators on the daily chart reveals a firmly bullish outlook, signaling potential for further upward movement. The current consolidation phase serves as a corrective measure to address overbought conditions, paving the way for renewed upward momentum.
In terms of support levels, initial support is anticipated at 150.59, corresponding to the Fibonacci retracement level of 23.6% of the recent upleg from 146.48 to 151.86. Further significant support is expected around the 150.00/149.80 region, which encompasses both psychological support and the Fibonacci retracement level of 38.2%. Additionally, the rising 10-day moving average reinforces this support zone. Any extended downward movements are likely to find strong buying interest, maintaining the broader bullish sentiment and setting the stage for a healthy correction before targeting higher levels around 151.90/94.
Res: 151.90; 151.94; 152.56; 153.00
Sup: 151.00; 150.59; 150.00; 149.80
