- The greenback bulls are advancing to reclaim a two-decade high at 131.00.
- An Ascending Triangle formation is hinting for an inventory distribution phase.
- The RSI (14) has found a cushion of around 131.00.
The USD/JPY pair is facing barricades around 129.00 after a firmer rebound from 128.00 in the Asian session. On Wednesday, the asset witnessed a sheer downside move after failing to sustain above 129.00, which is weighing pressure on the greenback bulls.
A firmer rebound from the lower boundary of the Ascending Triangle chart formation is hoping for a bullish reversal towards the horizontal resistance at 131.35, which is also the two-decade highest auction price. The ascending trendline is plotted from April 26 low at 126.95, adjoining May 12 low at 127.52.
A sideways move is expected from the 20- and 50-period Exponential Moving Averages (EMAs), which are placed at 128.97 and 129.24 respectively.
Meanwhile, the Relative Strength Index (RSI) (14) has sensed support from 40.00 that signals the presence of a responsive buying action. A decisive move by the momentum oscillator above 60.00 will strengthen the greenback bulls.
For an upside, the greenback bulls need to overstep 20-EMA at 128.97 confidently, which will send the major towards the psychological resistance of 130.00. A breach of the latter will expose the asset to recapture its two-decade high at 131.35.
Alternatively, the yen bulls could dominate if the asset drops below May 12 low at 127.52. This will drag the asset towards April 26 low at 126.95, followed by April 13 high at 126.32.
USD/JPY four-hour chart
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