USD/JPY Price Forecast: Uptrend shows fatigue as RSI divergence hints at short-term pullback

The Japanese Yen (JPY) steadies against the US Dollar (USD) on Friday, with USD/JPY pausing its two-day winning streak despite the Greenback’s broader strength, as renewed verbal warnings from Japanese officials revive intervention concerns.

Japan’s new Finance Minister Satsuki Katayama said the government is “closely monitoring FX with a high sense of urgency,” a remark that offered the Yen some intraday support after the pair touched fresh multi-month highs on Thursday.

At the time of writing, USD/JPY is trading around 154.00, holding firm near an eight-and-a-half-month high and on track for its biggest monthly gain since June.

Meanwhile, the US Dollar Index (DXY), which measures the Greenback’s value against a basket of six major currencies, is extending its advance for the third straight day, hovering near three-month highs around 99.80, poised for a second consecutive weekly gain, supported by fading expectations of additional Federal Reserve (Fed) interest rate cuts.

From a technical perspective, USD/JPY remains in a strong uptrend on the daily chart, but signs of exhaustion are emerging. The pair continues to trade well above its 21-day Simple Moving Average (SMA) at 151.85 and the 100-day SMA at 148.14, reflecting a sustained bullish structure.

However, momentum indicators suggest that upside momentum is starting to fade. The 14-day Relative Strength Index (RSI) currently stands around 66.23, showing a mild bearish divergence as prices reached new highs while the RSI failed to confirm the move. This divergence often signals a potential pause or minor correction in the near term.

A brief pullback or consolidation cannot be ruled out before another attempt higher. Immediate resistance is seen at 154.80, the February 12 high, followed by 155.53, the peak from February 4.

On the downside, initial support sits at the 153.00 psychological level. A sustained break below this area could trigger a deeper correction toward the 151.50-152.00 zone, where the 21-day SMA aligns with previous horizontal support. Losing this zone would shift the near-term bias from bullish to neutral or even bearish, exposing the next support around the 150.00 handle and potentially lower levels.