USD/JPY may rise toward the 40-year high of 162.84. The 14-day Relative Strength Index’s decline to the mid-50s suggests that consolidation is mitigating earlier overbought conditions. The currency pair is situated marginally above the nine-day EMA of 161.98. USD/JPY is recovering after two consecutive days of declines, trading near 162.00 during the Asian session on Monday. The currency pair is maintaining a bullish near-term bias as the spot price remains above both the nine-period and 50-period Exponential Moving Averages.
A predominant bullish bias is also suggested by the daily technical analysis, which shows that the USD/JPY pair is staying within an ascending channel pattern. Meanwhile, the 14-day Relative Strength Index has eased back toward the mid-50s, indicating that the latest consolidation is addressing prior overbought conditions without compromising the overarching uptrend. The USD/JPY pair may encounter initial resistance at the 40-year high of 162.84, achieved on July 1, subsequently followed by the upper boundary of the ascending channel near 164.00.
On the downside, immediate support is positioned at the nine-day EMA of 161.98, succeeded by the lower boundary of the ascending channel near 160.80, and subsequently the 50-day EMA at 160.58. A breach beneath the channel would reveal the four-month low of 155.04, noted on May 6.