USD/JPY Price Forecast: Dragonfly doji looms, bulls target 141.00

• USD/JPY recovers after diving to a YTD low; a daily close above 140.25 paves the way for further upside.
• Key resistance levels include 142.57 (Tenkan-Sen), 143.52 (Senkou Span A), and 144.48 (Kijun-Sen).
• Momentum remains bearish, but bullish patterns like a 'dragonfly doji' or 'hammer' could signal a leg higher if confirmed.

The USD/JPY recovers some ground late in the North American session after touching a new year-to-date (YTD) low of 139.58 earlier in the day. At the time of writing, the major pair traded at 140.85 and registered minimal gains of 0.03%.

USD/JPY Price Forecast: Technical outlook

The downtrend would likely continue after clearing December's 28 low of 140.25, but USD/JPY buyers bought the dip, clearing the latter as the pair aims towards 141.00.

A daily close above 140.25 would open the way to testing key resistance levels amid a busy week of monetary policy decisions from the Federal Reserve and the Bank of Japan.

Momentum hints that sellers remain in control, as shown by the Relative Strength Index (RSI). But if Monday's price action completes a 'dragon-fly doji' or a 'hammer,' look for a leg up.

On further strength, USD/JPY's first resistance would be the Tenkan-Sen at 142.57, followed by the Senkou Span A at 143.52. If those levels are cleared, buyers can aim for the Kijun-Sen at 144.48.

Conversely, if sellers drag prices below 140.25, that can pave the way for further downside.

USD/JPY Price Action - Daily Chart