USD/JPY Price Analysis: Refreshes multi-month tops ahead of Powell, eyeing mid-107.00s

USD/JPY continued scaling higher on Thursday and shot to near seven-month tops.
The momentum confirmed a fresh bullish breakout through an ascending channel.
Slightly overbought RSI on the daily chart warrants some caution for bullish traders.

Haresh Menghani FXStreet

The USD/JPY pair maintained its strong bid tone through the mid-European session and was last seen hovering near the 107.35 region, or the highest level since July 2020.

Sustained US dollar buying, despite a softer tone surrounding the US Treasury bond yields, was seen as one of the key factors driving the USD/JPY pair higher. Bulls seemed rather unaffected by a modest pullback in the equity markets, which tends to underpin demand for the safe-haven Japanese yen.

From a technical perspective, the momentum pushed the USD/JPY pair beyond a resistance marked by the top boundary of an over two-month-old ascending channel. This might be seen as a fresh trigger for bullish traders and might have already set the stage for an extension of the ongoing positive move.

That said, RSI (14) on the daily chart has moved above the 70 mark and points to slightly overbought conditions. This, in turn, warrants some caution before positioning for any further appreciating move ahead of the Fed Chair Jerome Powell's scheduled speech later during the North American session.

Nevertheless, the USD/JPY pair seems poised to prolong the strong momentum further beyond the 107.60 congestion zone and aim to reclaim the 108.00 round-figure mark for the first time since July 2020.

On the flip side, any pullback might now find some support near the trend-channel resistance breakpoint ahead of the 107.00 mark. Further weakness might be seen as a buying opportunity and remain limited near the 106.70-65 horizontal zone, which should now act as a strong base for the USD/JPY pair.

Only a sustained break below will negate the near-term constructive outlook. The USD/JPY pair might then accelerate the corrective slide towards the 106.00 mark en-route the 105.50 confluence support, comprising of the very important 200-day SMA and the lower boundary of the mentioned channel.

USD/JPY daily chart

Technical levels to watch

USD/JPY

Overview
Today last price	107.38
Today Daily Change	0.40
Today Daily Change %	0.37
Today daily open	106.98

Trends
Daily SMA20	105.64
Daily SMA50	104.55
Daily SMA100	104.45
Daily SMA200	105.44

Levels
Previous Daily High	107.16
Previous Daily Low	106.68
Previous Weekly High	106.69
Previous Weekly Low	104.92
Previous Monthly High	106.69
Previous Monthly Low	104.41
Daily Fibonacci 38.2%	106.97
Daily Fibonacci 61.8%	106.86
Daily Pivot Point S1	106.73
Daily Pivot Point S2	106.47
Daily Pivot Point S3	106.25
Daily Pivot Point R1	107.2
Daily Pivot Point R2	107.41
Daily Pivot Point R3	107.67

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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