- USD/JPY grinds higher though struggles around resistance at 134.00.
- US Treasury bond yields retrace from daily highs, putting a lid on the USD/JPY upward move.
- The USD/JPY is upward biased in the near term, but a break above the 200-hour EMA is needed to pave the way towards 136.50s.
The USD/JPY advances sharply during the North American session, underpinned by high US Treasury yields, up 0.66% on an upbeat sentiment trading day, courtesy of US House Speaker Pelosi leaving Taiwan, while US equities remain in the positive, bolstered by companies earnings. At the time of writing, the USD/JPY is trading at 133.95.
USD/JPY Price Analysis: Technical outlook
The USD/JPY is neutral-to-upward biased, but it’s facing solid resistance at134.57, the 50-day EMA. Even though buyers regained control, the Relative Strength Index (RSI) is still in negative territory, which means that sellers lost steam and could re-enter with confidence. Still, they will need a daily close below 134.00 to remain hopeful of lower prices.
USD/JPY 1-hour chart
In the hourly chart, the USD/JPY is neutral-to-upward biased. The hourly EMAs are located below the exchange rate, except for the 200-hour EMA at 134.58, which would be difficult resistance to hurdle. Nevertheless, price action in the last couple of days, breaking the August 1 daily high at 133.56, exacerbated the rally towards weekly highs at 134.54. That said, the USD/JPY in the near term is headed up.
Therefore, the USD/JPY’s first resistance would be the 200-hour EMA around 134.58. Break above will expose the R2 daily pivot at 135.00, followed by the July 27 daily high at 136.57. On the flip side, the USD/JPY first support would be the 20-hour EMA at 133.53. A breach of the latter will expose the 100-hour EMA at 132.78, followed by the 50-hour EMA at 132.40.