Detailed FX Market Outlook and Analysis

USD/JPY Daily Analysis 04-MAY-2023

USD/JPY Daily Analysis

The recent drop below 135.13 support in the USD/JPY pair indicates a temporary peak at 137.76, which was rejected by 137.90. The intraday bias is now bearish towards the 133.00 support level, and a firm break there could lead to a target of 129.62 support. However, as long as 129.62 support holds, there is still a chance for a larger rebound from the 127.20 level to resume in the future.

Looking at the bigger picture, the price movements since the high of 151.93 are considered to be part of a corrective pattern within a long-term uptrend. The first leg of this pattern appears to have ended at 127.20, while the current rebound is viewed as the second leg. A sustained break above the 31.8% retracement level of 136.34 could trigger a stronger rebound towards the 61.8% retracement level of 142.48. Conversely, a break below 129.62 would suggest the start of the third leg, which would take the price down to the 127.20 low.

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