USD/JPY is currently trading around 143.62, entering a consolidation phase after a recent rise. This analysis uses technical indicators such as ADX (trend strength), DMI (Directional Movement Index), and moving averages (MA) to assess the potential market trends and provide insights. Despite the recent strong upward movement, the market has transitioned into a range-bound movement, with unclear direction. The key question is whether the market will break upwards or enter a correction phase.
Currently, USD/JPY is trending upwards with both the 50-period MA (blue) and 200-period MA (red) indicating a continued medium-term upward trend. The 50MA is providing support beneath the current price, so unless strong selling pressure emerges, a sharp decline seems unlikely. On the other hand, there is resistance around the 143.80–144.00 zone, and unless this level is broken decisively, the market is at risk of entering a short-term correction phase. If the price falls below the 143.20–143.00 zone, further downside is possible.
Image source: cTrader platform
The ADX (yellow line) at the bottom of the chart is currently below 20, signaling a weakening of the trend. Additionally, the gap between +DI (green) and -DI (red) is narrowing, indicating a balance between buyers and sellers. In this situation, range trading strategies are more effective than breakout strategies. Until ADX starts rising again, it's advisable to be cautious about following any strong trends.
USD/JPY is currently lacking a clear short-term directional trend, and the following points will be important to watch:
Bullish Scenario (Breakout Play)
Entry: Breakout at 143.80–144.00
Take Profit: 144.30–144.50
Stop Loss: Below 143.40
Bearish Scenario (Reversal Play)
Entry: Below 143.00 (breakdown)
Take Profit: 142.70
Stop Loss: Above 143.50
With a lack of clear direction, the basic strategy is to wait for a breakout. Currently, USD/JPY's moving averages are still trending upwards, but the ADX's decline indicates a weakening trend. It is prudent to wait for a clear signal, either a break above 144.00 or a drop below 143.00, before making trading decisions. Both trend-following and range-trading strategies should be considered flexibly.
This report is for informational purposes only and does not constitute a recommendation for trading specific financial products. All trading decisions should be made at your own discretion and responsibility.
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This article is intended for informational purposes only and does not constitute financial or investment advice. The analyses and strategies mentioned are based on past data and current market conditions, and may be subject to change in the future. When making investment decisions, always conduct your own research and consult a professional if necessary.
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