• Inventory distribution at multi-year high levels has brought a pullback in the asset.
• Advancing 100-EMA is still supporting the prolonged uptrend.
• A pullback towards the trendline will fetch potential bids for the major.

The USD/JPY pair drags on profit-booking after printing a multi-year high of 129.41. The asset has witnessed a dream run in the previous few weeks after overstepping the prolonged consolidation range of 113.48-116.35 in the mid of March. The asset has tumbled as the momentum oscillators turned extremely overbought, which has brought a mild correction in the asset.

On an hourly scale, USD/JPY has tumbled after observing an inventory distribution in a narrow range of 128.97-129.41. An inventory distribution at multi-year high levels indicates a shift in inventory from institutional investors to retail participants. The trendline placed from Thursday’s low at 125.09, adjoining to near Monday’s low at 126.44, will act as major support going forward.

The asset has slipped below the 20-period Exponential Moving Average (EMA) at 128.66, which indicates a weakness in the short term. While, the 100-period EMA at 127.50 is scaling higher, which signals that the long-term uptrend is still intact.

The Relative Strength Index (RSI) (14) has tumbled into a 40.00-60.00 range from the bullish range of 40.00-60.00, which advocates a pullback.

A drop to near trendline support at 127.50 will activate greenback bulls, which will drive the asset towards Tuesday’s high at 129.41, followed by a two-decade high at 130.67.

On the contrary, a reversal can be witnessed if the asset plunge below Monday’s low at 126.24, which will send the major to Thursday’s low at 125.09. A breach of the latter will drag the pair to April 10 low at 124.04.

USD/JPY hourly chart