USDJPY continues to soar, beware of the 159 price level

Fundamental Analysis USDJPY Key Takeaways 

The probability of a rate hike in January is reduced: After the Bank of Japan kept its benchmark interest rate at 0.25% last month, Ueda made dovish remarks at a press conference, which intensified market speculation that the Bank of Japan might not raise interest rates in January, causing the yen to fall to its lowest level against the dollar since July, as most market observers had expected the next rate hike to take place in January. 

US Treasury yields suppress the yen: The prospect of high US Treasury yields has increased the attractiveness of fixed-income assets and demand for the US dollar. The 10-year Treasury yield remains above 4.6%, and the USD/JPY still has the momentum to support the upward trend. 

Technical Analysis USDJPY Daily Chart Insights 

(USDJPY Daily Price Chart, Source: Ultima Markets MT4) 

Stochastic oscillator: The slow line just left the overbought area and intersected with the fast line again, which is about to send a bullish signal, suggesting that short-term bullish forces still have the upper hand. 

Oscillation range: USD/JPY has been adjusting and oscillating since December 20. After stepping back on the purple 13-day MA yesterday, a pin bar was formed. Today’s Asian session broke through yesterday’s high, which is also the upper edge of the oscillation range, confirming the intraday bullish direction. 

Resistance target: Based on the possibility of Japanese government intervention in fundamentals and the suppression of the 160 neckline position of the monthly line from a technical perspective. The upward target of USD/JPY needs to be conservative, and the first target is the 61.8% Fibonacci extension line of 159.208. 

USDJPY 1-hour Chart Analysis 

(USDJPY H1 Price Chart, Source: Ultima Markets MT4) 

Upward channel line: After a wide range of fluctuations, the exchange rate accelerated its rise and broke through the upward channel line, clarifying the strong bullish power. During the Asian session, focus on long opportunities. 

Stochastic oscillator: The indicator quickly broke through the 50 median line, and the current fast line is about to enter the overbought area. Based on the momentum of the strong rise in the exchange rate, today’s indicator may appear extremely overbought in the overbought area. After waiting for the top divergence to appear, we can no longer blindly be bullish during the day. 

USDJPY Pivot Indicator 

(USDJPY M30 Price Chart, Source: Ultima Markets APP) 

According to Pivot Indicator in Ultima Markets APP, the central price of the day is established at 157.60, 

Bullish Scenario: Bullish sentiment prevails above 157.60, first target 158.70, second target 159.10; 

Bearish Outlook: In a bearish scenario below 157.60, first target 157.20, second target 156.85. 

Conclusion 

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