Technical Analysis – USDJPY rally could be on its last legs
June 26, 2023 2:27 pm
USDJPY is moving sideways today, but last week it managed to reach a new 2023 high of 143.86. This pair has been on an upward path, and it is currently 12.5% higher than the 2023 low of 127.21. In fact, USDJPY has been continuously trading around the upper boundary of the Bollinger band, confirming the very aggressive pace of the current upleg.
With the Average Directional Movement Index (ADX) reaching its highest level since the October 2022 rally, the bulls remain confident despite today’s muted move. However, the stochastic oscillator is again preparing to spoil the party. It is currently trading inside its overbought (OB) territory and it is trying to break its moving average. Should such a move occur and the stochastic then moves even further below its OB area, the chances of the current correction continuing rise significantly.
Having said that, the bears are ready to act forcefully and push USDJPY towards the 139.36-139.96 range that is populated by the July 14, 2022 high and the 23.6% Fibonacci retracement level of the March 9, 2022 – October 21, 2022 uptrend respectively. Even lower, the 50- and 200-day simple moving averages (SMAs) at the 137.15-137.96 range could spell trouble for the bears.
On the flip side, the bulls begrudgingly accept the need for a small correction, but they are still keen on registering a new 2023 high. They continue to target the August 11, 1998 high at 147.71 before setting their eyes on the 32-year high at 151.94.
To conclude, USDJPY bears are desperately trying to engineer a sell off towards the 137.15 area, but they need a decisive push from the stochastic oscillator.
USDJPY is moving sideways today, but last week it managed to reach a new 2023 high of 143.86. This pair has been on an upward path, and it is currently 12.5% higher than the 2023 low of 127.21. In fact, USDJPY has been continuously trading around the upper boundary of the Bollinger band, confirming the very aggressive pace of the current upleg.
With the Average Directional Movement Index (ADX) reaching its highest level since the October 2022 rally, the bulls remain confident despite today’s muted move. However, the stochastic oscillator is again preparing to spoil the party. It is currently trading inside its overbought (OB) territory and it is trying to break its moving average. Should such a move occur and the stochastic then moves even further below its OB area, the chances of the current correction continuing rise significantly.
Having said that, the bears are ready to act forcefully and push USDJPY towards the 139.36-139.96 range that is populated by the July 14, 2022 high and the 23.6% Fibonacci retracement level of the March 9, 2022 – October 21, 2022 uptrend respectively. Even lower, the 50- and 200-day simple moving averages (SMAs) at the 137.15-137.96 range could spell trouble for the bears.
On the flip side, the bulls begrudgingly accept the need for a small correction, but they are still keen on registering a new 2023 high. They continue to target the August 11, 1998 high at 147.71 before setting their eyes on the 32-year high at 151.94.
To conclude, USDJPY bears are desperately trying to engineer a sell off towards the 137.15 area, but they need a decisive push from the stochastic oscillator.
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