USDJPY pair gains some bullish momentum for the seventh consecutive day.
The USDJPY pair gains some bullish momentum for the seventh consecutive day on Tuesday. Climbing to its highest level since November 2022. Around the 145.85 zone.
The Japanese Yen (JPY) has continued to underperform in the aftermath of the Bank of Japan’s (BoJ) more dovish posture. Despite the fact that the BoJ is the only central bank in the world to retain a negative benchmark interest rate. This, in turn, is observed. As a significant element operating as a tailwind for the USDJPY pair. Despite the underlying optimistic tone around the US Dollar (USD), underpinned by expectations. That the Federal Reserve (Fed) would maintain rates higher for a longer period of time.
Fears of intervention keep bulls from putting new wagers, limiting the major’s ascent.
Even the bullish Japanese GDP data. Which showed that the economy increased by 1.5% in the second quarter and by 6% on an annualized basis, failed to bring any relief to the JPY. However, rumors of a possible intervention by Japanese authorities to halt any further decline. In the native currency prevent bulls from putting further bets. The fundamental background, on the other hand, implies that the USDJPY pair’s path of least resistance is to the higher.
USDJPY Technical Outlook
From a technical standpoint, the recent robust move-up over the last one-and-a-half weeks or so it has been following an upward trend-channel. This, together with last week’s break of the 145.00 psychological level. Lends credibility to the USDJPY pair’s bullish outlook.
However, the Relative Strength Index (RSI) on the 1-hour chart is indicating slightly overbought circumstances. Which should be taken into account by optimistic traders.
As a result, any following rise is more likely to meet strong opposition and be limited at the 146.00 level, which represents the top border of the aforementioned trend channel. The aforementioned handle should operate as a critical milestone, and if crossed, will be viewed as a new trigger for bullish traders, lifting the USDJPY pair above an intermediate barrier in the 146.35 level, towards the 146.75-146.80 region, enroute to the 147.00 round figure.
Any major corrective slide, on the other hand, may now find excellent support at the 145.00 resistance breakpoint. This is followed by the bottom end of the ascending channel, which is now set at 144.60. A convincing breach below the latter might invalidate the positive setup and alter the short-term bias in favor of bearish traders. The USDJPY pair may potentially fall to the 144.00 level and subsequently to the 143.30 horizontal support.
