- USD/JPY extends the previous day’s recovery to refresh multi-day top.
- Three-week-old ascending resistance line can join overbought RSI (14) to challenge Yen pair buyers.
- Ascending triangle restricts immediate moves, bears stay off the table unless witnessing break of two-month-long support line.
USD/JPY rises to the highest levels since the last November as it cheers the broad US Dollar strength while extending Monday’s rebound amid early Tuesday in Europe. With this, the Yen pair prints mild gains around 138.80 by the press time.
In doing so, the USD/JPY remains firmer inside a three-week-old ascending triangle, approaching the top line of the chart pattern of late. It’s worth noting, however, that the overbought RSI (14) could join the stated immediate hurdle near 139.00 to challenge the Yen pair buyers.
Even if the quote manages to cross the 139.00 hurdle, the November 30, 2022, peak of around 139.90 and the 140.00 round figure may act as additional upside filters to challenge the bulls before giving them control. Following that, the September 2022 low of 140.35 may act as the last defense of the USD/JPY bears.
On the other hand, the USD/JPY pair’s pullback remains elusive unless the quote stays beyond the aforementioned triangle’s lower line, close to the 138.00 threshold.
In a case where the Yen pair breaks the 138.00 support, one-week-old horizontal support near the mid-135.00s and the 200-SMA level of near 134.90 can challenge the bears.
It should be observed that the USD/JPY sellers need validation from an upward-sloping support line from late March, close to 134.65 at the latest, to retake control.
Overall, USD/JPY is likely to remain firmer but the road towards the north is long and bumpy.
USD/JPY: Four-hour chart
Trend: Limited upside expected