Technical Analysis:
USD/JPY is currently trading at 151.07, showing signs of a pullback after failing to break above the resistance level at 152.28. The price has encountered resistance near the 50-period Weighted Moving Average (WMA) at 152.28, while the 200-period WMA at 150.94 is acting as strong dynamic support. The price is hovering just above the 200-WMA, with the recent pullback indicating the possibility of a bearish continuation if the price closes below this support level.
The overall trend remains bullish as long as the price stays above the 200-WMA. However, failure to hold the 151.00 level could lead to further declines toward the 150.50 support zone. A move back above 152.28 would signal a resumption of the bullish trend.
- Support: Immediate support is seen at 151.00, with the next level around 150.50 (psychological level).
- Resistance: Resistance lies at 152.28 (50-WMA), followed by the next key resistance at 153.00.
Moving Averages:
USD/JPY remains above the 200-period WMA, suggesting the overall trend is still bullish. However, the 50-period WMA at 152.28 is acting as a resistance level. A breakout above this would indicate a bullish continuation, while a break below the 200-WMA would suggest a potential shift to bearish momentum.
Volume:
Volume has increased during the recent pullback, suggesting heightened market activity. If the price breaks below the support at 151.00 with strong volume, further downside pressure could follow.
Key Levels to Watch:
- Support: 151.00 (immediate support), 150.50 (next key support)
- Resistance: 152.28 (50-WMA), 153.00 (next upside target)
Outlook:
USD/JPY is testing critical support around the 151.00 level. If this level holds, the pair could resume its bullish trend, targeting the resistance at 152.28. However, a break below 151.00 could lead to further downside toward 150.50, signaling a potential shift in momentum.
Fundamental Analysis:
The US Dollar continues to benefit from the Federal Reserve’s hawkish stance, while the Bank of Japan’s dovish monetary policy keeps the Yen under pressure. Inflationary concerns in the US and the widening interest rate differential between the two economies are likely to support the USD/JPY in the near term, though traders should monitor any shifts in central bank policies for further direction.
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