Home Forex trading Rallies sharply in the direction of 135.00 on consumers stepping in, eyeing...

Rallies sharply in the direction of 135.00 on consumers stepping in, eyeing the 20-DMA

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  • The USD/JPY is soaring during the week by almost 1.50%.
  • A bullish-engulfing candle pattern in the daily chart opens the door for further gains.
  • In the near term, a pullback towards 134.00 is on the cards.

The USD/JPY rises for the third time during the week, reaching a fresh weekly high at 135.50, spurred by positive US jobs data released on Friday, which caused a knee-jerk reaction of almost 200 pips, from around 133.07 to its aforementioned weekly high. At 135.06, the USD/JPY gains 1.66%.

USD/JPY Price Analysis: Technical outlook

USD/JPY’s Friday price action shows that the major formed a huge bullish-engulfing candle pattern, meaning buying pressure is stepping in. At the same time, the exchange rate sits above the 50-day EMA at 134.84, which, decisively broken, could pave the way towards the 20-day EMA at 136.04. Worth noting that buyers are gathering momentum, as shown by the Relative Strength Index (RSI), about to cross the 50-central line, another reason for sellers to get out of the way once buyers have regained control.

Therefore, the USD/JPY’s first resistance would be the 135.00 figure, followed by the 20-day EMA at 136.04, and then the June 22 daily high at 136.71.

USD/JPY Daily Chart

Meanwhile, the USD/JPY hourly chart illustrates the major faced resistance near the R3 pivot at 135.60, dipping towards the R2 daily pivot point at 135.00, where bids keep the pair above the 135.00 figure. Nevertheless, the uptrend appears to be losing steam, as the Relative Strength Index reached overbought territory, meaning that buying pressure is easing, so a pullback towards the R1 daily pivot around 133.94 is on the cards.

USD/JPY Hourly chart

 USD/JPY Key Technical Levels

 



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