- USDJPY remains stuck within 151-152 range
- Neutral trend looks safe for now
- But strong support keeps bullish forces alive
USDJPY has been gradually inching higher after dropping near the floor of the sideway range at the end of March to briefly touch 151.01. Prices made it all the way to 151.94 on Wednesday before easing again.
However, with both the 20- and 50-day simple moving averages (SMA) lurking below the price action, there is still a possibility of a fresh attempt to break above the 152.00 ceiling in the near term. Looking at the momentum indicators, the stochastic oscillator is sending positive signals in the four-hour chart, as the %K line has crossed above the %D line. The RSI is somewhat more neutral as it remains flat, but it managed to hold above the 50 level after the latest dip.
Should the positive momentum gather more traction, the bulls will likely again target the 152.00 handle. A successful break above it would bring the 123.6% Fibonacci extension of the early February-March downleg at 152.55 into view. Further gains would turn attention to the 161.8% Fibonacci of 153.60.
However, if the bears manage to defend the 152.00 level in the coming days, a sharp pullback would become inevitable. The 151.00 floor would become the first major test in the negative scenario, with the 100-day SMA offering further support at 150.70, after which the 200-day SMA would come into scope at 150.10. A drop below the psychologically important level of 150.00 would shift the short-term risk to the downside.
In brief, USDJPY still stands a chance of hitting fresh 34-year highs. But the longer it lingers within its current sideways range without breaching the upper bound, the more likely that it will reverse lower at some point.
