USD/JPY Outlook: Potential Upside for USD/JPY Above 139.50

The USD/JPY currency pair has been under downward pressure recently, with the 100-day Simple Moving Average (SMA) standing at 137.023 and the 200-day Exponential Moving Average (EMA) at 138.23. As of the latest data point, the current price is 138.326, indicating a slight recovery from previous lows. The Ichimoku baseline is situated at 141.158, highlighting the bearish sentiment in the market.

When considering the various indicators, we observe that there are 10 sell signals, 9 neutral signals, and 6 buy signals. Similarly, the oscillators show 2 sell signals, 8 neutral signals, and 1 buy signal. In terms of moving averages, there are 8 sell signals, 1 neutral signal, and 5 buy signals. These mixed signals suggest indecisiveness in the market and a lack of clear trend direction.

The Relative Strength Index (RSI) is at 35, indicating a neutral position. The RSI suggests that the market is not currently oversold or overbought, which aligns with the consolidation phase mentioned in the analysis.

The Moving Average Convergence Divergence (MACD) level (12,6) is at -562, indicating a sell signal. This suggests that the bearish momentum is still prevailing in the market.

USD/JPY Technical analysis: Bull Bear Power indicator is at -3.083, further confirming the bearish sentiment

According to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, the downside pressure on USD/JPY is expected to lose momentum once the pair surpasses 139.50. This indicates that a potential bullish shift could occur if the pair manages to break above this level.

In the short term, the 24-hour view suggests that USD/JPY is likely to trade in a range between 138.20 and 139.30. This aligns with the consolidation phase mentioned earlier, as the pair is expected to remain within a relatively tight range.

Looking ahead, in the next 1-3 weeks, the analysis indicates that a break above 139.50 would indicate stabilization of the USD weakness that started early last week. However, it is worth noting that the pair briefly rose to 139.40 in the early NY session, indicating a potential slowdown in the downward momentum.

In summary, based on the technical analysis, the USD/JPY currency pair is currently facing downside pressure but is also experiencing a consolidation phase. The mixed signals from indicators and oscillators suggest a lack of clear trend direction. Traders should closely monitor the key level of 139.50, as a break above this level could signal a potential bullish shift in the market.