USD/JPY bulls have their sights on the 2015 high after dispatching key technical levels.
The Japanese Yen approached the first quarter of the year with a huge loss north of 5%, with much of that move occurring in March when USD/JPY rose above the high-profile, psychological 120 level. That put the Yen at the lowest mark versus the Greenback since early 2016. The Yen may fall even further, given the currency pair’s technical posture.
USD/JPY has climbed steadily since early 2021. That uptrend stemmed from the 38.2% Fibonacci retracement level from the 1998 to 2011 move. More recently, prices pierced above the 61.8% level. The 2015 high at 125.85 is now within striking distance. On the monthly timeframe, the Relative Strength Index (RSI) is oriented firmly higher within overbought territory, while the MACD oscillator trends higher. Prices may hit that 2015 high, less than 4% away from current prices, in the coming months.
Moreover, the 2002 peak would shift into focus if the Yen weakened enough for USD/JPY to dispatch the 2015 high. The 130 psychological level and the 78.6% Fib level would likely be the major resistance levels before prices would attack 135.16, which is only around 7.5% higher. While that would constitute a rather significant move, given the recent pace, it may not be off the table.
Alternatively, the speed at which the Yen weakened last quarter leaves bears susceptible to a possible reversal versus the US Dollar if USD/JPY longs decide to begin taking profits. The 61.8% Fib near the 120 level would provide a possible target in a reversal. Still, when considering the broader fundamental landscape, the Yen looks likely to continue weakening through the second quarter.
USD/JPY Monthly Chart
Chart created with TradingView
Source. Invest now with as low as $500, Earn up to 3% ROI daily on GTI Trade.