US Dollar Consolidates After Extending Rally Against Japanese Yen

The USDJPY currency pair has extended its impressive upside move that originated from the 151.86 low, rallying as high as 157.70 in recent trading sessions. However, the subsequent pullback from the 157.70 high suggests that a consolidation phase within the broader uptrend is currently underway.

Potential for Further Downside Consolidation

While the broader technical outlook remains constructive, deeper losses in the USDJPY are still possible over the coming days. The key area to watch on the downside is the rising trendline support visible on the 4-hour chart.As long as this trendline support holds on a closing basis, the overall technical bias will remain tilted to the upside, with the potential for another rally after the current consolidation period.

Key Resistance Levels

In the near-term, the first level of resistance to watch on the topside is the 157.20 area. A breakout above this level could potentially trigger an upside move to retest the 158.00 previous resistance.If buyers can push the USDJPY above 158.00, the next key target would be the 159.00 resistance zone.

Downside Risks on Trendline Break

On the flip side, a breakdown below the rising 4-hour trendline support would likely signal that the upside move from 151.86 has completed at the 157.70 high.In this scenario, the next key downside target for the USDJPY would be located in the 154.50 area.

Levels to Watch

The key levels to watch in the USDJPY are the rising 4-hour trendline support, the 157.20 and 158.00 resistance levels, along with the 159.00 upside target and the 154.50 support area.

As long as the pair remains above the rising trendline, the overall technical bias will remain tilted to the upside, with the potential for a continuation move toward the 159.00 level after the current consolidation.

However, a breakdown below trendline support would be a significant technical event, likely opening the door for a deeper pullback toward the 154.50 support zone.

The USDJPY uptrend remains intact despite the recent pullback, but the direction of the next big move will likely be determined by the price action around the rising 4-hour trendline support in the sessions ahead.