The USDJPY pair has been trading sideways just below the 152.00 level, a point that was significantly defended by Japanese authorities back in 2022. Despite this, momentum indicators are nearing overbought conditions, hinting at a possible shift in the current trend.
Potential Price Movements
After establishing a strong uptrend from early March when it bounced off the 200-day simple moving average, USDJPY hit a fresh 34-year high of 151.95. If bullish pressures persist, the pair could retest this peak and potentially break through to reach new highs, with the next major resistance level at 153.00 followed by 154.64, which represents the 123.6% Fibonacci extension of a previous downleg.
On the other hand, if a pullback occurs, the recent support level at 150.87, which also served as resistance in February, could act as the initial barrier for the bears. Further down, strong support might come into play at the 78.6% Fibonacci level of 149.40, potentially leading to a test of the 61.8% Fibo level at 147.44.
Current Price Range
Currently, USDJPY seems to be trapped within the 151.00-152.00 range, as the bulls show reluctance to push the price above the 2022 intervention zone. The repeated failure to break through this barrier raises questions about the possibility of a downside correction in the near future.
The USDJPY pair’s trading activity is at a critical juncture, with conflicting signals from momentum indicators and historical price levels suggesting potential shifts in the current trend. Traders and investors should closely monitor price movements at key levels to gauge the likelihood of further upside or a reversal in the coming sessions.