The USD/JPY pair continues to extend its winning streak for the fourth consecutive session, as it hovers around 155.80 during the Asian trading hours on Thursday. Analysis reveals that the pair is currently consolidating within an ascending channel, with key technical indicators pointing towards a bullish bias.
The 14-day Relative Strength Index (RSI) remains positioned above the 50-level, indicating underlying strength in the bullish momentum. Furthermore, the momentum indicator Moving Average Convergence Divergence (MACD) line is currently above the centerline and converging below the signal line. A potential crossover of the MACD line above the signal line could serve as a confirmation of the bullish trend, suggesting a signal to buy.
In terms of potential price levels, the psychological resistance zone around 156.00 stands as a key obstacle for further upside movement. A decisive break above this level could pave the way for the pair to test the upper boundary of the ascending channel, situated around 159.70.
Conversely, immediate support is seen at the 14-day Exponential Moving Average (EMA) at 154.89. A breach below this level may expose the lower boundary of the ascending channel, aligning with the psychological support at 154.00. Should the pair break below this crucial support level, a retest of May’s low at 151.86, recorded on May 3, could be on the cards.
Overall, the USD/JPY pair maintains a bullish outlook, with technical indicators signaling potential further gains. Traders are advised to closely monitor key resistance and support levels for strategic decision-making amidst ongoing market volatility.
