USD/JPY technical analysis: Extends bounce at 109 above SMAs

USDJPY has managed to find a foothold around the 109.00 handle, lifting the price back above the simple moving averages (SMAs) and the 110.00 hurdle. The persistent bullish bearing in the SMAs is nurturing the positive structure, in spite of the retracement in the pair.

That said, the active negative charge in the Ichimoku lines is endorsing the pullback from the 15-month high of 111.65 but the sideways bearing of the blue Kijun-sen line suggests buyers are countering downside pressures. On top of that, the short-term oscillators are currently conveying conflicting messages in directional momentum. The MACD is beneath its red trigger line and has slid a tad below the zero mark, while the RSI is struggling to advance, presently ranging just south of the 50 level. Additional upside price action is also being promoted in the stochastic oscillator.

Maintaining control of the reins, buyers may face early constraints from the 110.34 and 110.69 nearby highs respectively, which could soften upside momentum ahead of the 111.00 key border. However, if bullish forces secure a lead, the price may jump towards the 111.65 obstacle and the critical March 2020 peak of 111.71. Successfully navigating above 111.71 may then cement buyers as the frontrunners, driving the price to challenge the 112.22-112.40 resistance belt, shaped by the April 2019 high and the February 2020 rally peak.

Alternatively, for sellers to regain control they would need to dip the price below the area of 109.85-110.00 (previous resistance-now-support) and into the Ichimoku cloud. Next support could arise from the 100-day SMA at 109.48 before the 109.06-109.30 boundary comes into play. From here, a price dive under the 109.00 level could direct sellers towards the support section of 108.33-108.60.

Summarizing, for USDJPY to retain its positive tone, the price would need to endure above the SMAs and the 109.00 barrier.