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USD/JPY Faces Resistance, Potential Pullback Looms

The US Dollar (USD) is strengthening against the Japanese Yen (JPY), with USD/JPY currently testing resistance around 156.79 (May 14th high). While the overall uptrend remains intact, a temporary pullback might be on the horizon.

Factors to Consider:

  • Upward Trend: The USD/JPY is in an established uptrend across all timeframes, suggesting potential for further gains despite the resistance level.
  • Momentum Indicator: The Moving Average Convergence Divergence (MACD) indicator hints at a lack of momentum in the recent price surge. This could be a sign of a potential slowdown or correction.
  • Support Levels: A pullback might find support at the cluster of moving averages between 155.50 and 155.80.

Key Breakouts:

  • Resistance Breach: A decisive break above 156.79 on a 4-hour closing basis would signal a continuation of the uptrend, with the next target potentially at 157.98 (May 1st high).

The USD/JPY faces a crucial test at the current resistance level. While the uptrend suggests eventual upside, a temporary pullback is a possibility. A confirmed break above resistance would strengthen the bullish case, whereas a decline with a break below support could indicate a deeper correction.