USDJPY Technical Analysis - Interest Rates in Focus
On the daily chart below, we can see that the price is now clearly in an uptrend after breaking out of the falling channel. The ultimate target should be the 142.17 level, but it’s still too early to know if that’s going to be reached.
As of now, the price broke another resistance at 134.50 although it’s finding a bit of struggle rallying decisively away from it. The moving averages are clearly pointing north, and they should offer support for the price as it goes further up.
On the 4 hour chart below, we can see that there’s a divergence between the price and the MACD as the price tries to rally away from the 135.50 resistance. This is a signal of a loss of momentum and generally we get a pullback before the trend resumes.
Although it looks unlikely that we will see such a big retracement, the strongest support zone is near the 133.00 handle where we have the confluence of the 38.2% Fibonacci retracement level, the previous swing point and the trendline.
Sellers will need to break that strong zone in order to switch the bullish bias into a bearish bias.