The USD/JPY pair recently pulled back to a critical trendline, found support, and is poised for a potential recovery. Despite the correction, the broader uptrend remains intact, with a strong possibility of a renewed push to higher levels. As the pair stabilizes around the 152.55 level, traders are eyeing key resistance and support levels that could dictate the next move for the US Dollar against the Japanese Yen.
Technical Analysis: Key Levels to Watch
The USD/JPY has been in a solid uptrend, and the current pullback provides a potential buying opportunity for those looking to ride the continuation of the bullish trend. The support at the long-term trendline around 152.55 has proven crucial, suggesting that the uptrend is far from over.
On the upside, the immediate resistance lies at the November 7 high of 154.71. A break above this level would likely resume the uptrend, with the pair targeting the next resistance zone at 155.24, which corresponds to the July 30 high. If the momentum continues, the pair could reach the July 19 high at 157.86, providing a bullish outlook for the near-term future.
Risk of Short-Term Reversal
However, traders should also be mindful of the risks. A break below the trendline support and the 151.29 level could signal a short-term bearish reversal. In such a scenario, the next target could be at 150.15, where the 100-day Simple Moving Average (SMA) might offer some support. A move below this level would raise concerns about the sustainability of the uptrend.
Conclusion: Bullish Sentiment Remains
While the USD/JPY pair is experiencing a slight correction, the prevailing uptrend remains intact. The current pullback presents a potential opportunity for buyers, provided the support at the trendline holds. With the overall technical landscape favoring the bulls, traders will be looking for a breakout above 154.71 to confirm the next leg of the rally. As always, caution is warranted in case of a bearish reversal, with key levels such as 151.29 and 150.15 providing important downside markers.
