The USDJPY stands at the back foot on Thursday, but still with limited downside, after Wednesday’s shooting start indicated that bulls might be running out of steam.
Traders reduced pace ahead of Easter holiday, which usually causes lower volumes, with price adjustment seen as the main scenario so far.
Daily tech show fading bullish momentum and south-heading stochastic after reversing from overbought territory that adds to signals of consolidative/corrective phase, while weekly studies are also overbought, as the pair is on track for the sixth consecutive bullish weekly close, but so far without clearer signals of reversal.
Weaker US yields weigh on dollar today, however underlying uptrend is intact, with mild pullback likely to precede fresh push higher, as the greenback remains inflated by global uncertainty.
Initial support lays at 124.76 (Tuesday’s low) followed by more significant rising 10 DMA (124.25) and 20DMA (122.88) which should contain deeper dips and keep larger bulls in play.
Only extension and close below 121.27 (Mar 31 through) would sideline bulls and signal deeper correction.
Res: 125.69; 126.00; 126.31; 126.55.
Sup: 125.08; 124.76; 124.25; 123.79.
