USD/JPY Price Analysis: Rebounds swiftly from multi-week low, hovers around 50 DMA

USD/JPY recovers over 200 pips from a multi-week low and climbs back closer to the daily high.
A solid intraday USD bounce turns out to be a key factor behind the strong intraday move up.
The lack of follow-through buying beyond the 50-day SMA warrants caution for bullish traders.

Haresh Menghani FXStreet

The USD/JPY pair is prolonging its solid intraday recovery from the 132.50 area and continues scaling higher through the early North American session. Spot prices recover over 200 pips from a six-week low touched earlier this Friday and move back to mid-134.00s, closer to the daily high in the last hour.

From a technical perspective, the post-FOMC steep decline stalls near support marked by an ascending trend-line extending from the April monthly swing low. Bulls, however, struggle to capitalize on the move beyond the 50-day SMA support breakpoint, warranting caution before positioning for any further gains.

Furthermore, oscillators on the daily chart, meanwhile, have just started drifting into negative territory. This further makes it prudent to wait for some follow-through buying before confirming that the USD/JPY pair has formed a bottom and the corrective fall from a 24-year peak has run its course.

In the meantime, any subsequent move up is likely to confront stiff resistance and remain capped near the 135.00 psychological mark. Sustained strength beyond could trigger a fresh bout of a short-covering move and lift the USD/JPY pair towards the next relevant resistance, just ahead of the 136.00 mark.

On the flip side, weakness back below the 134.00 round figure now seems to find decent support near the mid-133.00s. Failure to defend the said area would make the USD/JPY pair vulnerable to weaken back below the 133.00 mark and aim back to challenging the daily swing low, around mid-132.00s.

Some follow-through selling would mark a fresh bearish breakdown through the aforementioned ascending trend-line support and pave the way for a further near-term depreciating move for the USD/JPY pair.

USD/JPY daily chart

Key levels to watch

USD/JPY

Overview
Today last price	134.23
Today Daily Change	-0.05
Today Daily Change %	-0.04
Today daily open	134.28

Trends
Daily SMA20	136.8
Daily SMA50	134.16
Daily SMA100	129.82
Daily SMA200	122.17

Levels
Previous Daily High	136.58
Previous Daily Low	134.2
Previous Weekly High	138.88
Previous Weekly Low	135.57
Previous Monthly High	137
Previous Monthly Low	128.65
Daily Fibonacci 38.2%	135.11
Daily Fibonacci 61.8%	135.67
Daily Pivot Point S1	133.46
Daily Pivot Point S2	132.64
Daily Pivot Point S3	131.07
Daily Pivot Point R1	135.84
Daily Pivot Point R2	137.41
Daily Pivot Point R3	138.23

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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