Analysis of USD/JPY Price: Bulls Aim to Test Key Resistance at 132.60, with Attention on 50% Reversion and Support Levels

Time Stamp: March 21, 2023 3:52 PM
Source Node: 2526214

The USD/JPY currency pair has been on an upward trend since the beginning of the year, with bulls aiming to test key resistance at 132.60. This is a significant level for traders as it represents a major psychological barrier that, if broken, could lead to further gains for the pair.

One of the key factors driving the USD/JPY price higher is the divergence in monetary policy between the US and Japan. The Federal Reserve has been raising interest rates, while the Bank of Japan has maintained its ultra-loose monetary policy. This has led to a widening interest rate differential between the two countries, making the US dollar more attractive to investors.

Another factor contributing to the bullish sentiment for USD/JPY is the recent strength in the US economy. The US has been experiencing robust economic growth, low unemployment, and rising inflation, which have all supported the case for further rate hikes by the Federal Reserve.

However, there are also some risks to the upside for USD/JPY. One of these is the ongoing trade tensions between the US and China, which could lead to a slowdown in global growth and hurt demand for riskier assets like stocks and currencies such as the US dollar.

In terms of technical analysis, traders are closely watching the 50% reversion level at 130.70. This level represents a key support level for the pair and a break below it could signal a shift in sentiment towards the downside.

On the other hand, if the pair manages to break above the key resistance level at 132.60, it could open up further upside potential towards the next resistance level at 134.50.

Overall, the USD/JPY price is currently in a bullish trend, with bulls aiming to test key resistance at 132.60. However, traders should also pay attention to support levels such as the 50% reversion level at 130.70, as a break below this level could signal a shift in sentiment towards the downside. As always, it’s important to keep an eye on both fundamental and technical factors when analyzing currency pairs like USD/JPY.