- USD/JPY snaps six-day uptrend as it retreats from 24-year high.
- Bearish MACD signals, nearly overbought RSI favor corrective pullback.
- Bulls need validation from 137.50 to aim for mid-1991 peak.
- Five-week-long ascending trend line, 20-DMA restrict immediate downside.
USD/JPY pares recent gains at the highest levels since 1998, marked the previous day, as intraday sellers flirt with 137.00 during Tuesday’s Asian session. In doing so, the quote prints the first daily loss in seven while retreating from an upward sloping resistance line from late June.
The yen pair’s latest pullback also gains support from the nearly overbought RSI (14) and bearish MACD signals.
However, a five-week-old support line near 136.10 precedes the 136.00 threshold to restrict the immediate USD/JPY downside. Also acting as short-term support is the 20-DMA, around 135.50 by the press time.
It’s worth noting that the quote’s downside past 135.50 could drag the pair towards the mid-June low of 131.50.
Alternatively, an upside break of the nearby resistance line, at 137.50, will amplify the bullish bias.
In that case, the 140.00 psychological magnet and the mid-1991 peak of 141.94 will be in the spotlight.
Overall, USD/JPY remains in the bullish trajectory but a corrective pullback can’t be ruled out.
USD/JPY: Daily chart
Trend: Pullback expected