USD/JPY continues rallying for seventh week

The USD/JPY has gained 1.80% in the week, extending its rally to the seventh consecutive week. The USD/JPY retreats from highs at around 139.38, towards the middle of the 138.00-139.00 range on Friday, as Wall Street closes the week with gains between 1.83% and 2.15%, underpinned by positive data that could deter Fed policymakers from hiking 100 bps in the July meeting.

The USD/JPY is trading at 138.48, down 0.33% after beginning Friday’s session around the 139.00 figure, nearly daily highs, to then slide to the daily’s central pivot point at 138.54, where the major stabilized, ahead into the weekend.

The USD/JPY remains upward biased, but price action remains overextended. That means that USD/JPY still favors longs, but the Relative Strength Index formed a negative divergence and exited from overbought conditions. The USD/JPY could retrace from the YTD highs to its next support level at July 11 high-turned-support at 137.75.