USD/JPY Price Analysis: Bulls looking to seize back control near 129.00 mark, 23.6% Fibo.

The USD/JPY pair built on the overnight late rebound from over a two-week low and gained some follow-through traction on the last day of the week. The pair maintained its bid tone through the early North American session and was last seen trading just below the 129.00 mark, up nearly 0.50% for the day.

The risk-on impulse - as depicted by a strong recovery in the equity markets - undermined the safe-haven Japanese yen and acted as a tailwind for spot prices. Bulls further took cues from a solid rebound in the US Treasury bond yields, though a softer tone surrounding the US dollar capped the USD/JPY pair.

From a technical perspective, the recent pullback from a two-decade high stalled on Thursday near the 38.2% Fibonacci retracement level of the 121.28-131.35 strong move up. The mentioned support, around mid-127.00s, should act as a pivotal point for traders and help determine the near-term trajectory.

The subsequent move up, however, lacked follow-through beyond the 23.6% Fibo. level. This warrants some caution for bullish traders and positioning for any further appreciating move. In the meantime, the 128.50 region now seems to protect the immediate downside ahead of the 128.00 round-figure mark.

A convincing break below the latter would be seen as a fresh trigger for bearish traders and make the USD/JPY pair vulnerable to retesting mid-127.00s (38.2% Fibo.). the corrective decline could further get extended towards the 127.00 mark en-route the 50% Fibo. level, around the 126.45 region.

On the flip side, any subsequent move up is likely to confront stiff resistance near the 129.75-129.80 region. This is closely followed by the 130.00 psychological mark, which if cleared will negate any near-term negative bias. The USD/JPY pair might then aim back to reclaim the 131.00 round figure.

USD/JPY 4-hour chart

Key levels to watch