USDJPY has been trading within an upward sloping channel since mid-March, crossing above both its 50-day simple moving average (SMA) and the Ichimoku cloud. Even though the pair experienced a pullback after failing to extend its rally above the 200-day SMA, it has been steadily re-gaining ground in the last few daily sessions.
The momentum indicators currently suggest that bullish forces are in control. Specifically, the stochastic oscillator is ascending after posting a bullish cross, while the RSI is flatlining above its 50-neutral mark.
If buying pressures persist, initial resistance could be found at the 2023 high of 137.90. Surpassing that zone, the pair might ascend towards the July high of 139.38 before the November resistance of 142.24 comes under examination. Further advances could then cease at the 145.89 hurdle.
On the flipside, should the recent recovery fade, the price could reverse downwards to challenge the recent support of 135.51, which lies very close to the 50-day SMA. If that floor collapses, the bears may aim for 133.00 before attention shifts to the April bottom of 130.62. Failing to halt there, the March low of 129.63 could provide downside protection.
Overall, USDJPY seems to be rebounding after experiencing a moderate downside correction, with its ascending channel pattern remaining intact. However, a break above the double-top region of 137.90 is needed to turn the medium-term outlook back to bullish.
