October 6, 2022 12:25 AM ET
By: AnalysisWatch
The USD/JPY pair is showing a choppy performance in Tokyo trading as the risk-on impulse defends the downside while the upside is limited due to geopolitical tensions between Japan and North Korea. The major currency traded at 114.40-114.70 in Tokyo trade and is expected to continue its consolidation until a potential trigger is found.
On the four-hour scale, the major is in a stock adjustment, suggesting a slightly longer consolidation phase. Crucially, the adjustment process is one of accumulation or distribution by institutional investors. However, the formation of a fakeout has increased the chances of further accumulation.
The 20- and 50-period Exponential Moving Averages (EMAs) at 144.53 and 144.33, respectively, are trending upward, reinforcing the upward filters.
The Relative Strength Index (RSI) (14) oscillates between 40.00 and 60.00, suggesting an imminent consolidation.
If the asset manages to break above the September 22 high at 145.90, the bulls will push the asset towards the August 1998 high at 147.67. If the latter level is breached, the major will be pushed towards the psychological resistance of 150.00.
For a decisive downside reversal, the value needs to fall below the September 22 low at 140.35. Should this be the case, the value will be pulled towards the low of August 30 at 138.05 and then the low of August 23 at 135.81.
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