The JPY/USD currency pair is currently exhibiting bullish momentum, positioned above both the 50 and 200-day moving averages. There are two potential scenarios to consider:
Scenario 1: Bearish Movement
A potential downward movement could lead the price to test the 140.918 level, followed by further downside tests at the 61.8% Fibonacci level (also at 140.838). If these tests are successful, the market may continue to move lower, targeting the 140.359 to 140.137 levels, with a significant level of interest at 134.814. In the event of strong bearishness, the price could potentially decline further towards the 139.931 and 139.480 levels. The most critical support levels to monitor are located at 138.931 and 138.400.
Scenario 2: Bullish Movement
On the other hand, a bullish scenario suggests a higher price movement. The price may rise to retest the 141.950 level, and if this retest is successful, it could lead to further upward momentum towards the 142.417 to 142.890 levels. If these levels are surpassed, the market may continue to climb higher, testing the 143.273 and 143.453 levels. A major resistance level at the 38.2% Fibonacci level is situated at 143.944.
It is worth noting that the Relative Strength Index (RSI) for this market is currently within an oversold range, with a possibility of the price entering the range area. However, the overall momentum of the market remains bullish. The market could potentially be bearish even if the long-term momentum is up.
In conclusion, traders should closely monitor the JPY/USD pair for potential breakouts or reversals, taking into account the key support and resistance levels mentioned above. By considering both bullish and bearish scenarios, traders can better prepare for potential market movements and adjust their strategies accordingly.