Detailed FX Market Outlook and Analysis

USD/JPY Daily Analysis 21-FEB-2023

USD/JPY Daily Analysis

The USD/JPY currency pair is currently consolidating below the temporary top of 135.09, and the intraday bias remains neutral. If the currency pair breaks above the 135.09 level, it will resume the rise from 127.20 to a retracement of 38.2% from 151.93 to 127.20 at 136.64. It is likely that strong resistance will be seen at this level, completing the corrective rebound. On the downside, if the resistance level of 132.89 turns into support, it will lead to a deeper fall towards the 129.79 support level.

In terms of the bigger picture, the prior break of the 55-week EMA (now at 131.47) increases the chances of a medium-term bearish reversal, but this is not yet confirmed. A strong rebound from the current level, followed by a sustained break of the 38.2% retracement from 151.93 to 127.20 at 136.64, will indicate that the price action from 151.93 was merely a corrective pattern. However, if the currency pair is rejected by the 136.64 level, it will solidify the medium-term bearishness towards the 61.8% retracement of 102.58 to 151.93 at 121.43 and the 38.2% retracement of 75.56 to 151.93 at 122.75.

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