USD/JPY Technical Analysis: Reversal on the Horizon?

In the latest 4-hour chart, USD/JPY is showing signs of a potential pullback following a surge that saw prices exceed the upper Bollinger Band and touch the R1 weekly pivot level. Notably, this price action correlates with the pair moving back down towards the central Bollinger Band and the untouched weekly pivot, suggesting a range-bound environment.

The RSI indicates an overbought market, adding credence to the possibility of a reversal. Historically, such RSI levels often precede a retraction in price, aligning with our observed downward trajectory. Further support for this pullback is found at the 20-period SMA of the Bollinger Band, which currently sits at an interpolated level of 154.997. This level could soon play a pivotal role as a short-term target for bears.

In summary, traders should keep a close eye on the 154.997 level and monitor RSI for signs of weakening momentum, which could indicate the early stages of a broader retracement.

Trade closed: target reached:

it took a little longer as expected but the target was reached