USDJPY Price Analysis: Bulls bang on testing the previous week’s low around 138.50

• A double-bottom formation has led to a bullish reversal in the asset.
• The asset has climbed above the 20-and 50-EMAs that add to the upside filters.
• The RSI (14) is attempting to shift into the bullish range of 60.00-80.00.

The USDJPY pair has extended its recovery after overstepping the critical hurdle of 139.50 in the Asian session. The asset has refreshed its day’s high at 140.20 despite a rangebound performance by the US dollar index (DXY). Further development on Russia-Poland noise has sidelined the market mood.

Meanwhile, S&P500 futures have recovered the majority of their losses reported in early Asia. The 500-stock basket of the US is expected to regain the track toward the upside. The 10-year US Treasury yields have also shown a marginal recovery to near 3.80%.

On an hourly scale, the asset has witnessed a responsive buying action after testing the previous week’s low around 138.50. This has led to a formation of a Double Bottom chart pattern that indicates a reversal amid an absence of significant selling pressure while testing the previous cushion.

A sheer reversal has pushed the asset above the 20-and 50-period Exponential Moving Averages (EMAs) at 139.55 and 1.39.90 respectively, which adds to reversal filters.

Meanwhile, the Relative Strength Index (RSI) (14) is attempting to shift into the bullish range of 60.00-80.00. An occurrence of the same will strengthen the Greenback bulls further.

Going forward, a break above Monday’s high at 140.80 will trigger the double bottom breakout and activate the Greenback to hit Friday’s high at 142.49, followed by the horizontal resistance plotted around November 8 high at 146.94.

Alternatively, the chart pattern gets negated if the asset drops below Tuesday’s low at 137.66. This will drag the asset toward August 23 low at 135.81 and June 23 low at 134.27.

USDJPY hourly chart