USDJPY – Breaking key levels to provide new directional signals

USDJPY gained momentum in early Monday trading but remains within its recent range, awaiting a stronger directional signal.

The short-term outlook is expected to stay bullish as long as the price holds above the rising daily Tenkan-sen (149.16), which contained today’s dip. However, upside attempts have been limited thus far.

Attempts to break above the psychological 150 barrier have failed to secure a weekly close above this level, lacking the fresh bullish momentum needed for a move towards the more significant resistance zone at 150.69/76 (daily cloud top / 100DMA / 50% retracement of the 161.95/139.57 downtrend). A break of these levels would confirm the continuation of the uptrend from the 2024 low of 139.57, posted on September 16.

Daily technicals are mixed. Strong bullish momentum and a bull-cross between the daily Tenkan-sen and Kijun-sen provide positive signals, but the presence of a 100/200DMA death cross tempers the optimism.

The dollar is supported by the wide gap between the Federal Reserve and Bank of Japan’s monetary policies, along with market expectations of a Donald Trump election victory, which is seen as pro-business and dollar-positive.

However, any signals indicating the Fed might adopt a more dovish stance could put pressure on the US dollar.

A break below the 149.16/00 pivot levels would generate initial negative signals, risking a deeper pullback towards supports at 148.12 and 147.28 (broken Fibo 38.2% / rising 20DMA).

Res: 150.00; 150.76; 151.00; 151.40
Sup: 149.16; 149.00; 148.86; 148.12