■USD/JPY edges higher eyeing YTD high of 161.95 with strong RSI support.
■Formation of 'morning star' pattern suggests potential for further gains above 162.00.
■Key support at July 8 low of 160.26, with significant resistance at November 1986 high of 164.87.
The USD/JPY advanced for the second straight day and climbed above the 161.00 figure on Tuesday as Fed Chair Jerome Powell remained cautious on rate cuts despite acknowledging that the US central bank's dual mandate risks are more balanced. The pair trades at 161.29 and gains 0.28%.
USD/JPY Price Analysis: Technical outlook
The USD/JPY pair's uptrend is robust, with buyers poised to surpass the year-to-date (YTD) high of 161.95. The bullish Relative Strength Index (RSI) indicates the momentum is in their favor. Despite hovering around overbought conditions, the successive series of higher highs and higher lows justifies another leg up.
The major snapped back-to-back days of losses as a doji emerged on Monday, and today’s price action completed a ‘morning star’ chart pattern, hinting that a higher price loom.
If USD/JPY clears the psychological 161.50, the next resistance would be the YTD high ahead of 162.00. Additional gains lie overhead at the November 1986 high of 164.87.
On the other hand, if sellers step in and drag the USD/JPY exchange rate below the July 8 cycle low of 160.26, that will clear the path to challenging the 160.00 figure.
USD/JPY Price Action – Daily Chart
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