The USD/JPY has reversed from the highs achieved a couple of days ago but remains stubbornly perched within the loftier part of its long-term range.

The USD/JPY is trading near the 1.36700 vicinities as of this writing.  On the 23^rd of August, the USD/JPY currency pair managed to attain a high of nearly 1.37700 and this wasn’t a momentary spike. From the 19^th until yesterday the USD/JPY has managed to consistently trade above the 1.37000 level with rapid-fire price action. In early trading this morning the USD/JPY has moved slightly lower, but this bearish trend may prove short-lived.
 

The USD/JPY Continues to Demonstrate a Bullish Price Range

The USD/JPY will remain speculative and traders need to be careful.  Experienced traders however already know that. The trick to the puzzle is understanding the USD/JPY has been consistently testing its upper range and strong reversals lower have not proven durable as of yet.

Fundamental economic data and actions via central banks like the BoJ and Fed continue to prove rather unimpressive. Growth challenges, inflation, and interest rate policies remain hot topics of debate with no clear answers to resolve matters.

• The Bank of Japan’s Core CPI numbers earlier this week came in higher than expected; tomorrow the Tokyo CPI data will be released.
• Preliminary GDP results from the U.S will come today and Jackson Hole's central bank monetary policy statements will begin to make news today.

The 1.37000 looms over the USD/JPY with a very evident psychological threshold. The ability to break below this juncture this morning is noteworthy, but from a risk-reward perspective via trading does downside ability look more attractive than potential upside movement in the near term? A retest of the 1.37000 level in the short term might prove to be a significant buying signal for quick-hitting momentum trades with realistic targets.
 

Some Traders Believe the USD/JPY is overbought, is this Viewpoint Wrong?

Conservative speculators should be cautious considering the amount of nervous sentiment in the USD/JPY and the amount of data and news events that will unfold in the next two days. However, traders who are seeking wagering opportunities may view the coming storm as a chance to dive in and test their perspectives.

If current support levels near the 1.36600 to 1.36550 ratios hold water, this may prove to be a place to ignite buying positions that seek higher ground.  Trading conditions will prove to be fast for the remainder of the week and risk management is essential. The incremental climb upward in the USD/JPY may not be finished yet.
 

USD/JPY Short-Term Outlook:

Current Resistance: 136.850

Current Support: 136.490

High Target: 137.510

Low Target: 136.080

(Click on image to enlarge)

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