• 148.00 barrier proving difficult to overcome

• Still plenty of upside to achieve a break higher

• But bullish bias is showing signs of abating

USDJPY has been knocking on the door of the 148.00 handle for the past couple of weeks but to no avail. It’s made somewhat more progress today, crawling slightly above that level. However, whilst the technical indicators remain positive, momentum does appear to be easing.

The stochastic oscillator has flatlined inside the overbought region, suggesting a possible near-term correction is on the cards. The MACD on the other hand has been in a very gentle decline over the past week or so after it failed to rise above its red signal line, in a further indication that the upside forces are weakening.

Should USDJPY make a convincing break above 148.00, the bulls might then aim for crucial 150.00 zone that contains the 161.8% Fibonacci extension level of the July downleg at 149.90. Higher up, the 200% Fibo of 152.89 would likely come into focus.

However, if the 148.00 resistance holds, the pair could initially fall back to the 20-day simple moving average (SMA) at 146.95 before retreating towards the 145.00 level where prices peaked at the end of June. Steeper losses could see the pair head for the 100-day SMA in the 142.00 region, which is positively aligned with the ascending trendline taken from the March low. Even lower, the price could slip until the July trough of 137.23, which is within close proximity of the 200-day SMA.

To sum up, USDJPY could yet succeed in clearing the 148 hurdle, reinforcing the long-term uptrend. But should it come under selling pressure, the uptrend is secure as long as the price holds above the shallower ascending trendline taken from the January low.