The yen is strengthening, and the USD/JPY pair has been declining for the third consecutive day. The price has broken important short-term support levels at 140.75 (200 EMA on the 4-hour chart) and 140.57 (200 EMA on the 1-hour chart). However, the decline has halted at the significant support level of 140.30 (50 EMA on the daily chart).
Considering the upward long-term and medium-term trends, it is logical to expect a rebound and a resumption of the upward dynamics for USD/JPY in the current zone.
In this case, a break above the resistance levels of 140.57 and 140.75 will be the first signal for the resumption of long positions, with a break above the local resistance level of 142.00 as a confirmation.
The upper boundaries of the upward channels on the daily and weekly charts are located near the 148.00 mark. This will become the target in the event of a resumption of the pair's growth.
In an alternative scenario, the price will still break the above-mentioned support level of 140.30 and head towards the key support levels of 137.80 (144 EMA on the daily chart) and 136.80 (200 EMA on the daily chart). Near these levels, as well as the support level of 136.00 (50 EMA on the weekly chart), a new wave and a resumption of USD/JPY growth can be expected.
Even with this potential decline, USD/JPY remains in the bullish market zone—the medium-term, above the key support levels of 137.80, 136.80; the long-term, above the key support levels of 126.70 (144 EMA on the weekly chart), 123.40 (200 EMA on the weekly chart); and the global (above the key support level of 111.20).
Therefore, in our opinion, long positions remain preferable. However, entering them should only be done after breaking the 140.75 level.
Support levels: 140.30, 140.00, 137.80, 136.80, 136.00, 129.60, 126.70, 123.40
Resistance levels: 140.57, 140.75, 141.00, 142.00, 143.00, 144.00, 145.00, 146.00, 148.70
