USD/JPY Finds Strong Support at Key Fibonacci Zone
The USD/JPY pair has recently found robust support at a critical Fibonacci retracement level, sparking interest among traders. After hitting the 160.35 mark, which aligns with the 23.6% Fibonacci retracement level of the short-term uptrend that started on June 4, the pair saw a notable uptick. Despite this bounce, momentum indicators suggest that it might be premature to expect a sustained upward trend.
Currently, the pair is trading above the trendline drawn from the June 4 low, but significant resistance levels need to be surpassed to confirm the continuation of the uptrend. Both the RSI and MACD indicators support this cautious outlook. The RSI has dipped below its 50 line, and while the MACD shows signs of bottoming out, it remains below both its zero and trigger lines.
For the bulls, breaking above the 161.35 zone could open the path towards the 161.95 area, marked by the July 3 high. A successful breach here would push the pair into levels last seen in December 1986, potentially paving the way for advances towards the 163.00 zone or the psychological level of 165.00.
Conversely, if the pair slides below the trendline and the 160.35 level, bearish sentiment might increase. Initial support could be found at the 38.2% Fibonacci retracement level at 159.10, with further declines possibly extending to the 50% retracement zone around 158.20.
In summary, while USD/JPY has bounced from a key Fibonacci retracement level, the continuation of the uptrend is contingent on overcoming several resistance zones. Traders are advised to watch these critical levels closely.
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