Looking at the monthly charts, the USDJPY pair shows an inverted head and shoulder pattern which could have led to its recent rally in favor of the US dollar. Generally, the USDJPY bulls have been on steroids post-lockdown.
Since the beginning of 2022, the US dollar has seen significant gains when compared to other currencies. Most of the monthly closes for USDJPY this year have been bullish. Earlier in the month of July 2022, USDJPY reached 139.00 for the first time since 1998. This rally has been sustained for the past two months. And yesterday, on the 1st of September 2022, the pair reached a new psychological level of 140.00.
RSI currently indicates that USDJPY is overbought on the monthly and weekly charts. This could lead to a massive loss in the value of the US dollar in the coming months. From our analysis, this means that USDJPY might fall to 130.00.
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