• USD/JPY may rise toward the 40-year high of 162.84.
• The 14-day Relative Strength Index’s drop to the mid-50s indicates that consolidation is neutralizing previous overbought conditions.
• The currency pair is positioned slightly above the nine-day EMA of 161.98.

USD/JPY gains ground after two days of losses, trading around 162.00 during the Asian hours on Monday. The currency pair is keeping a bullish near-term bias as spot holds above both the nine-period and 50-period Exponential Moving Averages (EMAs).

Additionally, the daily technical analysis indicates that the USD/JPY pair is remaining within an ascending channel pattern, suggesting a prevailing bullish bias. Meanwhile, the 14-day Relative Strength Index (RSI) has eased back toward the mid-50s, suggesting the latest consolidation is working off previous overbought conditions without yet undermining the broader uptrend.

The USD/JPY pair could find initial resistance at the 40-year high of 162.84, which was reached on July 1, followed by the upper boundary of the ascending channel around 164.00.

On the downside, the immediate support lies at the nine-day EMA of 161.98, followed by the lower boundary of the ascending channel around 160.80, followed by the 50-day EMA at 160.58. A break below the channel would expose the four-month low of 155.04, recorded on May 6.

(The technical analysis of this story was written with the help of an AI tool. Know more.)