• USD/JPY grinds higher at two-month high, prints four-day winning streak.
• Descending resistance line from mid-December 2022, overbought RSI (14) prods Yen pair buyers.
• Sellers need validation from 200-DMA, previous resistance line from late March.

USD/JPY bulls appear running out of steam at the highest levels in two months during early Tuesday, making rounds to 137.70-60 heading into the European session.

In doing so, the Yen pair portrays failure to cross a downward-sloping resistance line from December 2022, close to 137.80 by the press time, amid overbought RSI (14) conditions.

Even if the pair manage to cross the 137.80 hurdle, successful trading beyond the 138.00 round figure becomes necessary to restore the market’s confidence in the bulls.

Following that, the late 2022 swing high near 138.20 and the 140.00 round figure may act as the last defenses of the USD/JPY pair bears before giving control to the buyers.

On the contrary, pullback moves need to conquer the 200-DMA support of 136.95 on a daily closing basis to convince USD/JPY sellers. Even so, the previous resistance line from late March, around 135.75 by the press time, joins the bullish MACD signals to challenge the Yen pair bears.

In a case where the USD/JPY pair closes below the 135.75 resistance-turned-support, the odds of witnessing further downside can’t be ruled out.

To sum up, USD/JPY remains on the bull’s radar even if the upside momentum appears elusive of late.

USD/JPY: Daily chart

Trend: Pullback expected