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MTrading Team • 2024-04-30

USDJPY reverses pullback from 34-year high on mixed Japan data

USDJPY reverses pullback from 34-year high on mixed Japan data

A mixed bag of Japan statistics triggered the USDJPY pair’s fresh run-up early Tuesday. In doing so, the Yen pair justifies mostly downbeat employment and activity data from the Asian major while reversing the previous day’s retreat from the highest level since 1990. Also favoring the upside bias are the bullish MACD signals and the quote’s U-turn from a seven-week-old rising support line, close to 154.70 by the press time. With this, the risk-barometer pair is likely approaching the 160.00 threshold. However, the overbought RSI conditions could challenge the buyers around the recent multi-year peak of 160.20. Even if the pair remains firmer past 160.20, the year 1990’s high of 160.40 and an upward-sloping resistance line stretched from late June 2023, around 161.60 at the latest, can prod the bulls.

On the contrary, USDJPY sellers need validation from the aforementioned support line from early March surrounding 154.70, as well as FOMC and the US NFP, to retake control even for a short term. Following that, an 18-month-old previous resistance line near 151.75 and the bottom line of a 10-month-long rising wedge bearish chart pattern, around 150.80, will be in the spotlight. In a case where the Yen pair remains bearish past 150.80, the 150.00 psychological magnet and the 200-SMA level of 148.20 will act as the final defense of the buyers.

Overall, the USDJPY pair remains bullish but the upside room appears limited as traders await this week’s key data/events, namely the monetary policy announcements from the Federal Open Market Committee (FOMC) and the monthly US employment report.

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