Japanese Yen Technical Forecast for Q3 2022: USD/JPY Targets 1998 High

The Japanese yen fell more than 10% against the US dollar in the second quarter as USD/JPY bulls rose with near relentless vigor. USD/JPY broke its 2015 high in April when prices rebounded 6.72%. The 2002 high then broke in June, putting prices back into 1998 territory.

USD/JPY bulls eye 1998 high

This year’s high at 147.65 marks the next major technical hurdle for USD/JPY. This is less than 8% compared to prices at the end of June. Given the recent pace of the currency pair’s gains, this level could be tested in the near term. A higher break would put prices at their highest level in over 30 years. The 1990 high at 160.16 would then present the bulls with their next key target.

USD/JPY monthly chart

Chart created with TradingView

Can prices sustain such a meteoric rally? The Relative Strength Index (RSI) suggests the answer is “yes”. The RSI hit an all-time high on the monthly timeframe, surpassing levels set at the end of 2014 and neutralizing the possibility of negative divergence (at least for now).

Seen from another angle however, it should be noted that the MACD oscillator is struggling to reach 2015 levels, although it continues to rise strongly. Here, the price high coincides with an indicator low, revealing a negative divergence. This can be a bearish sign. If prices fail to hold above the 2002 high through the start of Q3, a reversal of the rapid rise from Q2 could be possible. If so, the 200-day simple moving average could offer the bears an attractive target.

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