The USD/JPY pair has been rising for four consecutive days, but it is important to note that the RSI—the daily Relative Strength Index—shows overbought conditions, thereby discouraging traders from entering new bullish positions. Therefore, before planning for further upside, it would be prudent to wait for short-term consolidation or a minor pullback.
However, any corrective decline may find strong support at the psychological level of 157.00, as well as around 156.60. A break below this level could allow USD/JPY to extend its decline toward the psychological level of 156.00. This level will act as a pivot, and prolonged movement below it would trigger technical selling, which in turn could lead to significant losses.
On the other hand, the psychological level of 158.00 now represents an immediate barrier. A breakout above it would allow USD/JPY to accelerate toward the January 2024 high near 158.86 on the way to the next psychological level of 159.00.
