Technical Analysis – USDJPY rallies to another fresh 34-year high

• USDJPY surpasses 154.00

• Round numbers to be watched

• Stochastics indicate overstretched market

USDJPY is surging to another multi-year high above the 154.00 round number, adding 0.8% so far today. The technical oscillators are holding in overbought regions. The RSI is suggesting that more gains may be on cards; however, the stochastic oscillator is indicating an overstretched market as it is creating a bearish crossover within its %K and %D lines above the 80 level, hinting that a potential negative retracement is near.

Should the pair manage to strengthen its positive momentum, the next resistance could come near the next handles such as 155.00 and 156.00 before the market rallies towards the 161.8% Fibonacci extension level of the down leg from 151.95 to 140.20 at 159.15.

However, if prices begin a bearish correction, immediate support could come from the 151.95 obstacle, which overlaps with the 20-day simple moving average (SMA) ahead of the 150.87 barrier. The next key support to watch lower down is the 150.87 region ahead of the 50-day SMA at 150.45 before testing the medium-term ascending trend line at 150.00.

To sum up, USDJPY remains positive since prices are continuing the steep upward rally and only a decrease beneath the 200-day SMA may change the outlook to neutral.