USDJPY has been storming higher in the short term, posting a fresh 9-month high of 145.85 on Tuesday before paring some gains. Undoubtedly, the pair has approached a critical technical region around where the first round of intervention by the Japanese authorities took place, thus traders should be cautious as the probability of an impending correction has increased.
The momentum indicators currently suggest that bullish forces are intensifying. Specifically, the MACD is strengthening above zero and its red signal line but has not yet reached June highs, while the RSI is hovering deep in the positive zone after failing to pierce through the 70-overbought mark.
If buying interest persists, the price could initially face the September 2022 high of 145.89. Conquering this barricade, the bulls could aim at the 148.80 resistance territory observed in November 2022. A violation of that zone could set the stage for the 32-year high of 151.94.
On the flipside, should the rally lose steam and the price reverse lower, the previous 2023 high of 145.06 could prove to be the first barrier for the bears to clear. Piercing through that region, the pair might test 142.24 ahead of the 140.90 hurdle, which has acted both as resistance and support in the past. Further retreats could then cease at the July low of 137.23.
Overall, USDJPY seems to be stuck in a steep uptrend, but the price has reached levels that in previous occasions the Japanese policymakers were willing to protect. Will this scenario play out again?