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Title: USD/JPY Price Analysis: Stays defensive above 138.00 inside bull flag

July 18, 2022 01:03 AM ET

By: AnalysisWatch

The USD/JPY bears are struggling to hold the reins as the price recovers to 138.35 by the end of European trading on Monday. Thus, the yen pair remains in the red for the second day within a bull flag chart pattern.

The recent recovery of the price occurred from the weekly support line, which was around 138.08 at the time of writing. The recovery moves are also accompanied by firmer RSI and an easing bearish bias in MACD, which makes buyers hopeful.

However, in order for USD/JPY buyers to challenge last week's 23-year high of around 139.40, the upper boundary of the aforementioned bull flag at 138.65 must be clearly broken to the upside.

In this case, the 140.00 threshold could entice the short-term bulls ahead of the theoretical target of around 142.00.

In contrast, a break of the weekly support line at 138.65 is not a reason for the USD/JPY bears, as the support line of the mentioned flag and the 100-HMA at 137.95 seems to be a tough nut to crack for the sellers.

After that, the corrective pullback could target the July 12 low at 136.50. The one-week-old horizontal support around 137.75-70, however, may pose a challenge for USD/JPY sellers.

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