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USD/JPY retreats from one-month high to snap two-day uptrend.
RSI pullback from overbought territory favors the Yen pair’s U-turn.
Bullish MACD signals, sustained trading beyond the previous key resistance, 200-SMA favor bulls.
USD/JPY grinds near intraday low during the first loss-making day in three, mildly offered near 132.30 heading into Tuesday’s European session.
In doing so, the Yen pair takes clues from the RSI (14) to retreat from the 50% Fibonacci retracement level of the pair’s moves between the last December and January 2023. Even so, the quote remains on the bull’s radar as it keeps the previous week’s upside break of the key hurdles, now supports.
That said, the RSI retreat from the overbought territory and hence consolidation of the latest run-up appears logical. However, the bullish MACD signals and the successful trading beyond the resistance-turned-support levels seem to favor the Yen pair buyers.
The 200-SMA level surrounding 130.80 appears to be the immediate support for the USD/JPY bears to watch ahead of the 130.00 psychological magnet.
Following that, the previous resistance line from mid-December 2022, near 129.40 at the latest, could act as the last defense of the USD/JPY bulls.
On the contrary, a clear upside break of the 50% Fibonacci retracement level of 132.75 could propel the USD/JPY towards the 61.8% Fibonacci retracement, also known as the golden level of 134.05.
Even if the Yen pair remains firmer past 134.05, January’s top close to 134.80 may challenge the upside momentum.
Trend: Further upside expected
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