Detailed FX Market Outlook and Analysis

USD/JPY Daily Analysis 06-FEB-2023

USD/JPY Daily Analysis

The break of 131.56 resistance in USD/JPY confirms a short-term bottom at 127.20, based on bullish conditions in the 4-hour MACD. The intraday outlook is now bullish, with the first target being the 55-day EMA at 133.28. A firm break above this level could lead to a correction towards 136.64, which is the 38.2% retracement of 151.93 to 127.20. As long as 127.20 support holds, the risk remains slightly to the upside.

In the medium-term, the presence of the 55-week EMA at 131.39 raises the possibility of a bearish reversal, but this has not been confirmed yet. A strong rebound from current levels, followed by a sustained break above 136.64, would suggest that the drop from 151.93 is simply a corrective pattern. On the other hand, a rejection at 136.64 would reinforce the medium-term bearish outlook, targeting 61.8% retracement at 121.43 or 38.2% retracement at 122.75.

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