USD/JPY outlook: Extended consolidation to precede fresh bulls

Slobodan Drvenica Windsor Brokers

USD/JPY

The USDJPY edges lower in Asian/early European session on Tuesday, after two-day rally lost steam on approach to initial barrier at 145.00 (former tops), as risk appetite starts to return to play.

Overall picture remains bullish, but near-term action is losing momentum, after large swings on Japan’s intervention failed to register a clear break out of near-term congestion, suggesting that the intervention did not manage to provide a substantial support to Japanese yen, while the dollar remains well supported by safe-haven flows and hawkish Fed.

Daily Tenkan-sen and Kijun-sen are in bullish setup but turned sideways, signaling prolonged consolidation before bulls regain full control.

Daily Tenkan-sen offers initial support at 143.12, followed by 142.24 (Fibo 23.6% of 130.39/145.90 rally), where dips should find solid ground.

Only break below daily Kijun-sen (140.85) would weaken near-term structure and risk test of pivotal 140.00 support zone (psychological/Fibo 38.2% of 130.39/145.90.

Res: 144.78; 145.00; 145.90; 146.76.
Sup: 144.06; 143.54; 143.12; 145.55.

Interested in USD/JPY technicals? Check out the key levels

1. R3 146.82
2. R2 145.8
3. R1 145.28
PP 144.27
1. S1 143.74
2. S2 142.73
3. S3 142.21

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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