USDJPY Daily Analysis – May 22, 2023

The USDJPY currency pair has recently broken below its rising trend line on the 4-hour chart, suggesting that a period of consolidation for the uptrend from 133.49 is currently underway. Traders should exercise caution and closely monitor key levels as the pair enters a potential range-bound phase.

In the short term, range trading between 136.30 and 138.74 is expected to dominate the price action over the next couple of days. These levels will serve as important markers for traders, providing guidance on potential breakouts or reversals. It is crucial to note that range-bound markets can present unique challenges, requiring traders to adapt their strategies to suit the prevailing conditions.

As long as the support level at 136.30 holds, the overall uptrend remains intact, and a resumption of upward momentum can be anticipated. In this scenario, traders will closely watch for a breakout above the resistance level at 138.74, which could potentially trigger further upside movement towards the 141.00 area. The ability to surpass this key resistance level would suggest sustained bullish strength.

However, it is essential to consider alternative scenarios. A breakdown below the support level at 136.30 would indicate a potential completion of the recent upside move at 138.74. In such a case, the pair may target the next support level at 135.46, followed by 135.00 as potential downside targets. Traders should closely monitor price action and momentum indicators to gauge the strength of any potential downside movement.

To summarize, the USDJPY currency pair is currently consolidating within the context of its uptrend from 133.49. Range trading between 136.30 and 138.74 is expected in the short term. Traders should closely monitor these key levels for potential breakouts or reversals. Maintaining above 136.30 suggests a potential resumption of the uptrend, while a breakdown below this level could signal a shift in momentum. Targets include 138.74 on the upside and 135.46, followed by 135.00 on the downside. Adapting strategies to the prevailing market conditions and implementing effective risk management will be crucial for navigating the USDJPY market successfully.