USDJPY stretched RSI, 200- DMA drive BoJ-led rally

USDJPY bids higher to retest a multi-day high.

USDJPY investors prod the 200-day moving average as they test the boundaries of a two-month high at 137.00 early Monday. As a result, the Yen pair climbs for the third day in a row. Buoyed by the previous day’s upward breach of a downward-sloping resistance line from November. Which is now the immediate support. As well as the positive MACD signals.

However, the 200-DMA level surrounding the 137.00 round figure has recently joined the overbought RSI (14) line to challenge the USDJPY bulls.

Even if the Yen pair manages to break beyond the 137.00 barrier. A horizontal zone comprised of various levels marked since early December 2022, between 137.90 and 138.20. Would be key for pair buyers to monitor.

If the quotation manages to hold above 138.20, the chances of seeing the Pair rally hit a 61.8% Fibonacci retracement level of the October 2022 to January 2023 dip, at 142.55, will be scrutinized.

Alternatively, a USDJPY pullback remains elusive unless the quote remains above the resistance-turned-support line, which was around 135.85 at the time of publication.

Even if the USDJPY falls below 135.85, the mid-April swing high around 135.15 and the five-week-old rising support line at 133.70 might pose a challenge to the bears.

Overall, USDJPY is expected to continue stronger, although further gains are contingent on a 138.20 breakthrough.

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