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Technical Analysis – USDJPY slides from 9-month high, entering a consolidation phase
August 31, 2023 2:26 pmVideo
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USDJPY has been in a steady uptrend since the beginning of the year, posting a fresh nine-month high of 147.36 on Tuesday before paring some gains. However, some downside risks could arise soon as the pair remains above levels that the Japanese policymakers were previously willing to protect.
The momentum indicators currently suggest that the bullish forces are fading. Specifically, the MACD is softening below its red signal line in the positive zone, while the stochastic oscillator is retreating lower after posting a bearish cross.
If sellers gain total control, the recent support of 144.53 could act as the first line of defense. Sliding beneath that floor, the price could challenge previous resistance zones such as 142.24 and 140.90, which could now serve as support levels. Further declines might then cease at the July bottom of 137.23.
Alternatively, if the relentless year-to-date rally extends, the pair could initially face the recent nine-month peak of 147.36. A break above that zone could trigger a rally towards the 148.80 resistance territory observed in November 2022. Conquering this barricade, the bulls could then aim at the 32-year high of 151.94.
Overall, USDJPY has been trading sideways near its fresh 2023 high as the Japanese authorities have not yet threatened with a potential intervention. Can the pair extend its rally?
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