USD/JPY outlook: Bulls regain traction on improving daily studies/weekly bullish engulfing

Slobodan Drvenica Windsor Brokers

USD/JPY

USDJPY rose on Monday, offsetting initial negative signal from Friday’s strong upside rejection (long upper shadow of Friday’s daily candle / potential bull-trap over 157.52 Fibo barrier) and keeping near-term bulls in play.

Fresh advance pressures cracked Fibo level at 157.52 (61.8% of 160.39/152.88 bear-leg/30DMA) break of which to open way for renewed attack at more significant 200DMA barrier (158.40).

Improving technical picture on daily chart (RSI rises above neutrality zone, 10/20DMA in bullish configuration), along with weekly bullish engulfing, underpin the action, but overbought stochastic and 14-d momentum still in the negative territory, warm of headwinds bulls may face.

Broken 50% retracement level (156.64, reinforced by 20DMA) reverted to support which should hold dips and keep bullish bias.

Yen is expected to remain at the back foot following BOJ’s dovish hike last week and hawkish stance of the US central bank after raising rates for the first time since 2023 and signaled potential start of tightening cycle.

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

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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