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Title: USD/JPY Price Analysis: Brace for a volatility expansion sooner


September 30, 2022 12:00 AM ET


By: AnalysisWatch


The USD/JPY pair shows a slowdown in its upward momentum after reaching around 144.80 in Tokyo trading. Earlier, the value recovered significantly after falling to 144.30. By and large, the major currencies show choppy movements as investors wait for a possible trigger for sound action.


On the four-hour scale, the majors are in the process of stock adjustment, suggesting a slightly longer consolidation phase. Crucially, the adjustment process is one of accumulation or distribution by institutional investors.


This week, the U.S. Dollar Index (DXY) experienced a sharp sell-off while currencies considered risky soared. However, the USD/JPY currency pair showed no weakness and remained firmer. This suggests that the yen bulls are extremely vulnerable to the greenback bulls and even a decent pullback move will result in an inventory adjustment breakout to the upside.


The 50- and 200-exponential moving averages (EMAs) at 144.00 and 141.40, respectively, are rising, suggesting that the uptrend is intact.


The Relative Strength Index (RSI) (14) oscillates in a range of 40.00-60.00, suggesting consolidation is imminent.


Dollar bulls may continue to push the level higher after breaking above the previous week's high at 145.90, which will push the level 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 bearish trend reversal, the value must fall below the previous week's low at 140.35. If this is the case, the value will be pulled towards the August 30 low at 138.05, followed by the August 23 low at 135.81

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