- USD/JPY trades higher around 146.20, retracing from recent losses.
- The monthly high could be the immediate resistance, following November’s high.
- 23.6% Fibo appears to be the key support aligned to 21-day EMA.
USD/JPY recovers from the previous day’s losses, trading higher around 146.20 at the time of writing during the Asian session on Wednesday. The pair registered losses due to the fall in the US Dollar (USD), which could be attributed to downbeat US Treasury yields and disappointing US economic data on Tuesday.
#USDJPY Structure: Shooting Star on Daily TF Indicating Pause.
Strategy: Sell on Rise
Bullish: Above 147.40
Bearish: Below 145.60
Major #Resistance: 147.40
Major #Support: 145.60https://t.co/zJVXQGOA5u pic.twitter.com/8woBjeXuMl
— Aditi Sharma (@AditiSharma888) August 30, 2023
The pair may encounter an initial obstacle near the monthly high of 147.37 set on Tuesday. Following November’s high at 148.82, a strong break above the latter should encourage USD/JPY buyers to investigate the region near the psychological level of 148.00.
The pair could face the immediate barrier around the monthly high at 147.37 marked on Tuesday. A firm break above the latter could inspire the USD/JPY buyers to explore the area around the 148.00 psychological level, following November’s high at 148.82 level.
Dollar Pressured by Soft US Data
The dollar index held below 104 on Wednesday after losing half a percent in the previous session, weighed down by softer-than-expected US economic data which bolstered bets that…
— TRADING ECONOMICS (@tEconomics) August 30, 2023
The 14-day Relative Strength Index (RSI) is still above 50, indicating that purchasers of USD/JPY have a bullish bias. It appears that current momentum is greater because the Moving Average Convergence Divergence (MACD) line remains above the centerline and crosses the signal line.
On the flip side, the pair could meet the key support around the 14-day Exponential Moving Average (EMA) at 145.48, followed by the 23.6% Fibonacci retracement at 144.98 lined up with the 21-day EMA at 144.92.
— Crypto Trader Pro 🇺🇸 (@CryptoTraderPro) August 29, 2023
A break below that level could put pressure on the USD/JPY pair to navigate around 38.2% Fibonacci retracement at 143.50.
In the short term, the underlying trend remains to be bullish as long as the USD/JPY stays above the 50-day EMA.