USD/JPY technical analysis: Eases from multi-week tops, but holds steady above 100-day SMA
|- Stability in the global financial markets helped to build on the overnight up-move.
- The set-up seemed tilted in favour of bullish traders, a move beyond 109.00 handle.
The USD/JPY pair built on the overnight goodish intraday move up and climbed to fresh multi-week tops on Tuesday, albeit struggled to capitalize on the early uptick and surrendered a major part of its daily gains.
Despite the pullback, the has managed to hold its neck above the 108.00 handle and also seems to have found acceptance above 100-day SMA for the first time since early-May, supporting prospects for further up-move.
Moreover, technical indicators on hourly and daily charts have been holding steady within the bullish territory and further add credence to the near-term constructive outlook amid signs of stability in the financial markets.
Investors, however, seemed to wait for a fresh catalyst from the outcome of crucial central bank meeting - the FOMC on Wednesday and BoJ on Thursday - before positioning for any further appreciating move.
Hence, it will be prudent to wait for a strong follow-through buying in order to reaffirm the bullish bias and for a move beyond the 109.00 handle towards testing the very important 200-day SMA, around the 109.40 region.
On the flip side, any meaningful pullback below the 108.00 handle might continue to find decent support near the overnight swing lows, around mid-107.00s, which if broken might negate any near-term bullish outlook.
Below the mentioned support, the pair might again turn vulnerable to fall back below the 107.00 handle and test a previous strong horizontal resistance breakpoint, now turned support near the 106.75-70 region.
USD/JPY daily chart
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