USDJPY’s recent price action suggests a shift in momentum. This analysis examines the technical situation and explores potential scenarios for the currency pair.
USDJPY Breaks Trend Line:
Uptrend Faces Hurdle: A key technical development is the break below the rising trend line on the 4-hour chart. This trend line had been a strong support level throughout the recent uptrend that began at 150.80. The break suggests a completion of the upside move that reached a high of 160.21.
Consolidation or Reversal?
Trading Range Emerges: In the near future, USDJPY may enter a trading range between 154.50 and 160.21.
Scenario 1: Uptrend Resumption:
154.50 Support Crucial: As long as the price remains above the support level at 154.50, the decline from 160.21 could be considered a consolidation phase within the broader uptrend that began at 146.47.
Upside Potential: In this scenario, another rise to challenge the previous resistance at 160.21 could be possible after the consolidation. A decisive break above 160.21 would signal a resumption of the uptrend. The next target zone to watch could then be around the 162.00 area.
Scenario 2: Deeper Correction:
154.50 Breakdown Risks Reversal: A more bearish sign would be a breakdown below the 154.50 support level. This move could indicate a lengthier correction for the uptrend that started from the December 2023 low at 140.25.
Downside Target: If the correction deepens, a further decline towards the 151.00 area could be seen.
Overall Sentiment:The technical outlook for USDJPY has become uncertain in the short term. The break below the trend line suggests a potential trend reversal, but the future direction of the price will depend on how it behaves around the key support and resistance levels. Close monitoring of these levels is essential to determine if the uptrend resumes after a consolidation phase, or if a deeper correction unfolds.More By This Author:USDJPY Charges Higher: Uptrend Confirmed Or Bullish Momentum Extended?EURUSD Climbs: Uptrend Resumption Or Bullish Correction?GBPUSD Reverses Course: Downtrend Over Or Bullish Correction?
