USD/JPY: Technically Oversold
Active Monthly Resistance
Kicking off from the monthly chart, it is clear that the pair remains trending northbound. Momentum to the upside for the USD/JPY, however, has noticeably slowed this year compared to 2022, visible not only from the price action but also evident from the Relative Strength Index (RSI), seen testing overbought space and opening the door for negative divergence.
Technicians will also acknowledge the channel resistance currently in play (taken from the high of ¥125.86) on the monthly scale and neighbouring resistance coming in at ¥152.20. This, coupled with the RSI’s technical picture, highlights a possible correction in this market, potentially back to support at ¥143.85.
Support is Key This Week
Slowing upside momentum is evident on the daily chart (seen through price action and the RSI dipping under 50.00), as is the uptrend in play in this market. However, it is worth pointing out that although the RSI is beneath 50.00, a support area between 40.00 and 50.00 has been active since August (common in trending markets).
As you can see, buyers and sellers continue to square off around the widely watched ¥150.00 handle, but have failed to touch gloves with the resistance on the monthly chart at ¥152.20.
With price ending the week under the ¥150.00 level, support is drawn into view between ¥148.25 and ¥148.69. Knowing where we are coming from on the monthly timeframe, a break of the noted support area should not raise too many (technical) eyebrows this week. If this comes to fruition, a moderate Fibonacci cluster is present around ¥146.25ish, and a break of here would expose another layer of support from ¥144.25.
So, to wrap things up, chart studies largely suggest that bears are likely to remain in the saddle this week at least until ¥148.69. Breaching ¥148.25 to the downside could also prepare the ground for breakout selling opportunities in the direction of daily support at ¥146.25.
Kicking off from the monthly chart, it is clear that the pair remains trending northbound. Momentum to the upside for the USD/JPY, however, has noticeably slowed this year compared to 2022, visible not only from the price action but also evident from the Relative Strength Index (RSI), seen testing overbought space and opening the door for negative divergence.
Technicians will also acknowledge the channel resistance currently in play (taken from the high of ¥125.86) on the monthly scale and neighbouring resistance coming in at ¥152.20. This, coupled with the RSI’s technical picture, highlights a possible correction in this market, potentially back to support at ¥143.85.
Support is Key This Week
Slowing upside momentum is evident on the daily chart (seen through price action and the RSI dipping under 50.00), as is the uptrend in play in this market. However, it is worth pointing out that although the RSI is beneath 50.00, a support area between 40.00 and 50.00 has been active since August (common in trending markets).
As you can see, buyers and sellers continue to square off around the widely watched ¥150.00 handle, but have failed to touch gloves with the resistance on the monthly chart at ¥152.20.
With price ending the week under the ¥150.00 level, support is drawn into view between ¥148.25 and ¥148.69. Knowing where we are coming from on the monthly timeframe, a break of the noted support area should not raise too many (technical) eyebrows this week. If this comes to fruition, a moderate Fibonacci cluster is present around ¥146.25ish, and a break of here would expose another layer of support from ¥144.25.
So, to wrap things up, chart studies largely suggest that bears are likely to remain in the saddle this week at least until ¥148.69. Breaching ¥148.25 to the downside could also prepare the ground for breakout selling opportunities in the direction of daily support at ¥146.25.
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