USDJPY managed to breach the strong barrier around 108.40 and the 50% Fibonacci of the downleg from 112.39 to 104.44 on Tuesday and it remains to be seen whether the bulls can crawl above the 200-day simple moving average (SMA), and more importantly, above 109.50 to convince traders that the bearish wave off 112.39 has come to an end.
Although it somewhat weakened, the RSI continues to hold comfortably above its 50 neutral mark, while the MACD is also keeping strength above its red signal line, both indicating that the short-term risk remains positive overall. Meanwhile, the bullish cross between the 20- and 50-day SMAs is seen an encouraging sign that the pair may maintain the recent upside direction.
A rally above the 109.00-109.50 key area could retest the 110.00 level before hitting resistance around 110.70, which is also the 78.6% Fibonacci. Beyond the latter, the bulls may stall near 111.40 before challenging the 112.00 mark.
In case the price pulls back below 108.40, immediate support could appear near 107.80, while beneath that level, the door may open towards the 107.00-106.75 region. Further down, the familiar 105.50-105.00 restrictive zone could come back into the spotlight.
Looking at the three-month picture, the pair is in neutral mood, driving sideways within the 109.50-104.44 boundaries. Therefore, any violation at the edges would determine the next direction in the market.
Summarizing, although the short-term bias is looking positive, USDJPY needs to cross above the 109.00-109.50 area to cement the rebound off the 34-month low of 104.44 and at the same time shift the medium-term outlook to bullish.
Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
Google starts indexing Bitcoin addresses
Bitcoin address data is live on Google search results after users realized on Thursday that the tech giant started indexing Bitcoin blockchain data. However, mixed reactions have followed the tech giant's reversed stance on the cryptocurrency.
A Hollywood ending for fourth quarter GDP
The latest revisions put Q4 GDP at 3.4%, the second fastest quarterly growth rate in two years. Much of the upside was attributable to stronger consumer spending, yet fresh profits data affirmed it was a good quarter for the bottom line as well with profits up by the most since the Q2-2022.