USDJPY Strengthens on Renewed Bullish Signals from Daily Studies and Weekly Chart Formation

USDJPY moved higher on Monday, overcoming the initial bearish signal generated by Friday’s sharp rejection from session highs, which had raised the risk of a bull trap above the 157.52 Fibonacci barrier. The renewed advance keeps near-term bullish sentiment intact.

Fresh buying pressure pushed the pair above resistance at 157.52, the 61.8% Fibonacci retracement of the 160.39/152.88 decline, which also coincides with the 30-day moving average. A sustained break above this level would pave the way for a renewed test of the more significant 200-day moving average at 158.40.

The technical outlook continues to improve, with the RSI climbing above the neutral threshold and the 10- and 20-day moving averages maintaining a bullish configuration. In addition, last week’s bullish engulfing pattern on the weekly chart reinforces the positive bias. However, overbought stochastic readings and negative 14-day momentum suggest that upside progress may encounter some resistance in the near term.

On the downside, the 50% retracement level at 156.64, reinforced by the 20-day moving average, has turned into solid support and is expected to contain corrective pullbacks, preserving the broader bullish outlook.

Fundamentally, the yen remains under pressure following the Bank of Japan’s dovish rate increase last week, while the Federal Reserve’s hawkish stance, marked by its first rate hike since 2023 and signals of a potential tightening cycle, continues to lend support to the dollar.

Res: 157.52; 158.05; 158.40; 158.62
Sup: 157.00; 156.64; 155.75; 155.28