• USDJPY’s bounce off 154.50 still in place

• MACD and RSI head north

• But stochastics look overbought

USDJPY is retesting the 38-year high of 161.73 earlier today, continuing the rebound off the long-term uptrend line at 154.50.

The technical oscillators are standing in their overbought areas. The RSI is still holding above the uptrend line and the MACD is strengthening its positive momentum above its trigger and zero lines. However, the stochastic oscillator posted a bearish crossover within its %K and %D lines above the 80 level, suggesting a potential downside retracement.

In case of negative pressures, the market could meet support at the 160.20 barrier, which was the previous high before it heads lower to the 161.8% Fibonacci extension level of the downward wave from 151.85 to 140.20 at 159.10. A successful close below this level could see a retest of the 20-day SMA at 158.50 and the 157.80 barricade, which coincides with the rising trend line.

On the other hand, a rally to the upside again may drive the pair towards the next obstacles of the 162.00 and 163.00 round numbers before meeting the next resistance level at 164.50, taken from the peak in November 1986.

In brief, the outlook remains positive since prices hold above all the moving average lines and the uptrend line, but the stochastic oscillator indicates an overstretched market.