USD/JPY Price Analysis: Closes in on resistance with possibility of temporary pullback

USD/JPY closes in on a resistance level at former highs.
The pair could pullback temporarily from the technical resistance level.
The uptrend remains intact, however, suggesting further upside will probably eventually follow.

Joaquin Monfort FXStreet

USD/JPY has rallied up to retest technical resistance at around 156.79 (May 14 high), and there is a possibility it could temporarily falter.

USD/JPY Daily Chart

USD/JPY is in an uptrend on all timeframes, however, and given “the trend is your friend” this favors more upside eventually even if there is a correction at the aforementioned resistance level.

The Moving Average Convergence Divergence (MACD) momentum indicator is showing a lack of momentum in the most recent move up from the May 16 lows, which could be a warning sign. The blue MACD line has not crossed below the red signal line, however, as would be expected to accompany the beginning of a deeper pullback.

If USD/JPY corrects it will probably find support at the level of the cluster of Moving Averages between 155.50-80.

A break above the resistance level at 156.79 on a 4-hour period closing basis would indicate a continuation of the uptrend, with the next upside target probably at the 157.98 May 1 high.

Author

Joaquin Monfort

FXStreet

Joaquin Monfort is a financial writer and analyst with over 10 years experience writing about financial markets and alt data. He holds a degree in Anthropology from London University and a Diploma in Technical analysis.

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