USDJPY Extends Bullish Retracement

Market Analysis – May 19

The USDJPY pair continues climbing steadily after bouncing from the 140.280 demand level, showcasing a strong recovery. Buyers have firmly taken control, pushing the price toward the 151.90 resistance zone, which remains a key level to watch for potential breakouts or reversals.

USDJPY Critical Levels

Demand Levels: 140.290, 130.500, 127.500
Resistance Levels: 151.900, 158.500, 161.750

USDJPY Long-Term Trend: Bullish

The RSI (Relative Strength Index) flashed overbought signals at January’s 158.500 peak before reversing, indicating a potential reversal or correction. Price dipped below the 9-period MA (Moving Average), confirming the pullback. Recent RSI oversold conditions triggered the current upswing, but this prolonged retracement now threatens the bullish structure as the major highs are threatened, warranting caution.

The price smashed through a critical bearish trendline, eyeing 151.910 and signalling a potential shift in momentum. The current pullback tests a bullish order block that may provide support. Below the bullish order block is a lurking fair value gap beneath 145.700, which calls for caution as it could attract the price to invalidate the order block.

USDJPY Short-Term Trend: Bullish

The 4-hour chart shows the price filling a gap at 145.700, which could attract buyers and drive the price higher. A fresh higher high here would confirm upside continuation and potentially pave the way for further gains.

Traders may watch for a decisive break toward 151.900, which appears to be the next logical target for forex signals. A break above this level could signal a continuation of the uptrend. An RSI divergence and MA could aid a confirmation of sustained momentum, as these indicators can provide valuable insights into the pair’s future direction.