During the European session on Thursday (May 23), USD/JPY remained in a narrow range. The intraday report was 156.683, a decrease of 0.08%.
USD/JPY closed slightly higher at 156.75 on Wednesday, as FOMC minutes highlighted concerns about inflation and differences among policymakers over the monetary easing schedule.
The mild bullish trend was enough to push the price above the short-term resistance line set in April, thereby boosting optimism that continues to rise, but there are still a few resistance levels that may stop the rebound.
Specifically, the most recent rise was within the 23.6% Fibonacci retracement around 157.00 and the April boundary of 157.83-158.40, and overlapped with the March support trend line. The bulls must break through the latter to advance near the 2024 resistance line of 160.00. Even higher, the pair could target the key trend line area at 162.83.
In trend signals, a positive gap between the short and long term simple moving average (sma) currently supports an ongoing upward wave. The momentum indicator is also beneficial to bulls. The Relative Strength Index easily fluctuates above the 50 neutral line, the stochastic oscillation indicator rebounded again, and the price itself hovered within the bullish upper Bollinger region.
However, if the price falls below its 20-day moving average and the downside of 155.80, traders may start selling and push the price to the 153.00-153.60 range. This is the location of the 50-day moving average, the 50% Fibonacci level, and the two key constraint lines. Therefore, a lower close could confirm another drop to the 61.8% Fibonacci level of 151.70. If bears dominate, the short and medium term outlook may worsen, and the exchange rate may fall to the 149.40-150.00 area, where the 200-day moving average and 78.6% Fibonacci numbers converge.
Overall, although the USD/JPY bulls seem to have an advantage, it is difficult to say whether they can break through the 158.40 level.
At 13:04 Beijing time, USD/JPY was reported at 156.716/726, a decrease of 0.06%.