JP Morgan eyes potential early-summer pullback in USD/JPY after reaching key levels | Forexlive

JP Morgan has recently weighed in on the technical outlook for the USD/JPY currency pair, highlighting potential levels of interest after the pair reached specific targets.

According to JP Morgan, USD/JPY experienced a pullback after meeting its January-March equal swings objective at 140.384 and stalling just below the 141.707 January-March channel trend line. The bank believes that the 142.502 level, which is the 61.8% retracement of the October 2022 move, is among the resistances that could cap the bull trend in the first half of 2023.

While the current price action doesn’t show a clear pattern or signalling for a complete bearish trend reversal, JP Morgan suggests that such a development might take shape into early summer. The bank considers the 137.775-137.915 range, defined by the March/May range highs, and the 137.301 50-day moving average as critical nearby support levels. A sustained break below this support zone could significantly increase the likelihood of a multi-month trend reversal, regardless of whether a top pattern forms.

JP Morgan notes that if the pair breaks below the aforementioned support, the next support levels to watch are the 135.301 200-day moving average and the 133.382 January-March channel trend line. Medium-term support is clustered around the 127.27 level, which is the 50% retracement of the 2021 move, the May 2022 low at 126.365, and the June 2015 peak at 125.86.

On the flip side, if the pair moves higher, JP Morgan points to resistance levels at 145.115, 146.705 (October 78.6% retracement), and 147.62 (August 1998 peak).

Investors and traders will be closely monitoring these levels as key indicators of possible trend shifts or continuation in the USD/JPY pair.

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