USDJPY Analysis: Japanese Yen is Still in a Technical Bull Market

Fundamental Analysis of USDJPY

USDJPY Key Takeaways

• Hawkish attitude drives yen strength: Kazuo Ueda pointed out that Japan is struggling to meet the challenge of achieving the 2% inflation target. It is currently closer to the inflation target than at any time in the past 30 years. It continues to be expected that the price trend will rise towards the target. If the economy improves as expected, the level of policy easing will be adjusted, and it is crucial to judge whether the outlook is achieved without bias.
• The test of Japanese bonds on Wednesday this week: On Monday, Japan’s ultra-long government bonds ushered in a technical respite. But all eyes are now on Wednesday’s 40-year bond auction. If auction demand is weak, it may further push up yields and accelerate the selling cycle; conversely, strong demand may provide short-term stability to the market. However, any technical relief may only be temporary when the structural supply and demand imbalance has not been resolved.

Technical Analysis of USDJPY

USDJPY Daily Chart Insights

• Stochastic Oscillator: The indicator enters the oversold area below 20. Although being in the oversold area does not mean that the trend will reverse immediately, it suggests that there may be a need for a rebound or correction in the market in the short term, especially when it hits key support levels. However, in a strong bearish trend, the indicator may stay in the oversold area for a long time or only trigger a limited rebound.
• MAs suggest strong bearishness: The purple 13EMA continues to exert strong dynamic suppression on price rebounds. In the past few months, every time the price tried to rebound upward, it failed to effectively break through and stand above the 13EMA, and then resumed its decline. The current price is well below the black 65EMA and the green 200EMA, indicating that the medium- and long-term bearish trend is solid.

USDJPY 2-hour Chart Analysis

• Stochastic Oscillator: The blue fast line indicator continues to move downward after crossing the red slow line from the middle area, and has not yet entered the oversold zone (below 20). This shows that short-term bearish momentum still exists and the market still has downward potential.
• EMA system reveals a bearish pattern: the green 200EMA is at the top and tilted downward, the black 65EMA is below it and also tilted downward, and the purple 13EMA is at the bottom, directly forming a dynamic suppression on the price. This typical bearish arrangement indicates that the medium- and short-term trend is bearish.
• Key resistance area: The primary immediate resistance is near the purple 13EMA and the horizontal area of 143.00-143.10. This horizontal area was once support on the left side of the chart, and turned into resistance after breaking it. The price is currently consolidating below it. If the above resistance can be broken, the next resistance area worth paying attention to is the black 65EMA.

USDJPY Pivot Indicator

• According to the trading central in Ultima Markets APP, the central price of the day is established at 143.05,
• Bullish Scenario: Bullish sentiment prevails above 143.05, first target 143.35 , second target 143.60;
• Bearish Outlook: In a bearish scenario below 143.05, first target 142.50, second target 142.20.

USDJPY Price ForecastThe USDJPY Price Forecast indicates continued volatility as market participants digest Japan’s inflation trajectory and bond market signals. Given the solid bearish trend identified in the technical indicators, a cautious stance is advised. A break above the 143.10 resistance could trigger a short-term bullish rally, potentially pushing prices toward 143.60.

However, failure to break this level might lead to further downside pressure with possible targets near 142.20. Traders should monitor macroeconomic updates closely, especially any shifts in Japan’s monetary policy stance or unexpected bond auction results, which could quickly influence price direction.

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