USD/JPY tests the 160 barrier once more, reaching new multi-decade highs.

On Wednesday, USD/JPY reached a new multi-decade high, climbing above 160, as bullish momentum regained control following a two-day consolidation.

The fresh move above the psychological 160 barrier indicates strong bids, despite warnings that Japanese authorities might intervene to support the weakening yen, with the 160 zone seen as a potential trigger.

Long tails on the May and June monthly candles also signal robust buying interest, while the dollar remains supported by the significant gap between the monetary policies of the Federal Reserve and the Bank of Japan.

Bulls are ignoring overbought conditions on the daily chart, with an initial bullish signal expected if the price closes above the 160 level. This would open up targets at 162.16/163.38 (Fibonacci projections) and 164.00 (October 1986 high).

Rumors that Japanese authorities have raised the intervention threshold towards the 170 zone may further encourage bulls to sustain gains above 160.

Initial support is found at 160.00, followed by 159.60 (today’s low / 5DMA) and the rising 10 DMA (158.64), which should protect the downside.

Res: 161.00; 162.16; 163.38; 164.00
Sup: 160.00; 159.60; 158.64; 157.70