USD/JPY Needs to Clear 134: Here’s What Could Be in Store for This Pair

The USD/JPY currency pair has encountered obstacles as it continues to rise above the crucial resistance level of 134.50 during the Asian trading session. Despite the overall negative sentiment in the market due to the ongoing geopolitical tensions between the US and China and three missile launches near Japan’s Exclusive Economic Zone (EEZ), the asset is anticipated to move further upwards. The United Nations (UN) Security Council has arranged a meeting to address the North Korean missile launches.

Although the S&P500 futures have rebounded from most of their losses, investors remain hesitant to invest in risky assets. The US Dollar Index (DXY) has fallen after experiencing difficulty in maintaining its position above 103.70.

The Bank of Japan’s new leader, academician Kazuo Ueda, faces numerous challenges as the Japanese government anticipates a shift away from the current expansionary monetary policy that has been in place for over a decade. Governor Haruhiko Kuroda may make adjustments to smooth the transition process for Ueda, which could surprise international markets.

USD/JPY Technical Outlook

While attempting to surpass the horizontal resistance from the January 6 high of 134.77, the USD/JPY currency pair has sensed selling interest. However, a confident test of this resistance level suggests that the asset is in a transitional period and is likely to experience a bullish reversal. The asset has established itself above the 200-period Exponential Moving Average (EMA) at 132.00, indicating that there is potential for more gains.

The Relative Strength Index (RSI) (14) has shown a range shift structure, moving from the bearish segment of 20.00-60.00 to the bullish arena of 40.00-60.00, with the 40.00 level acting as support for US Dollar bulls. If the asset breaks above Friday’s high at 134.90, it could move towards the December 16 low at 135.90 and possibly the December 13 high around 138.00.

However, if the asset breaks the February 2 low of 128.08, Japanese Yen bulls could push the asset towards the January 16 low at 127.25, followed by the May 24 low at 126.35.

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

Related Articles

USD/JPY Climbs Toward 147 as BoJ Hawkish Tone and Fed Rate Bets Diverge

11 hours ago

Save

Forex Signals Brief May 16: Inflation Eases Sparking Fed Cut Bets, Gold Price Soars

16 hours ago

Save

USD/JPY Slips to 145.50 as BoJ Rate Bets and Trade Talks Support Yen

2 days ago

Save

Comments

Leave a Reply Cancel reply

You must be logged in to post a comment.