- USD/JPY was seen consolidating its recent gains to three-week tops, above mid-105.00s.
- The set-up favours bullish traders and supports prospects for further appreciating move.
- Only a sustained break below the 105.00 round-figure will negate the constructive outlook.
The USD/JPY pair now seems to have entered a bullish consolidation phase and was seen oscillating in a range around the 105.60 region, just below three-week tops set earlier this Tuesday. Given that the overnight dip was bought into near the 105.40-35 confluence support, the bias seems tilted firmly in favour of bullish traders and supports prospects for additional gains.
The constructive outlook is further reinforced by the fact that oscillators on hourly charts have been gaining traction and have also recovered from the negative territory on the daily chart. Hence, some follow-through positive move beyond the 106.00 round-figure mark, towards testing the next major hurdle near the 106.25-30 supply zone, now looks a distinct possibility.
The mentioned barrier is followed by 100-day SMA, around the 106.60-65 region, which if cleared will set the stage for an extension of the recent recovery from the 104.00 mark.
On the flip side, the 105.40 area might continue to act as immediate strong support, below which the USD/JPY pair might turn vulnerable to slide back to the key 105.00 psychological mark. The latter coincides with 200-hour SMA and should act as a strong near-term base for the major. A convincing breakthrough will now be seen as a fresh trigger for bearish traders.
USD/JPY 1-hourly chart
-637369791885276763.png)
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD dips below 0.6600 following RBA’s decision
The Australian Dollar registered losses of around 0.42% against the US Dollar on Tuesday, following the RBA's monetary policy decision to keep rates unchanged. However, it was perceived as a dovish decision. As Wednesday's Asian session began, the AUD/USD trades near 0.6591.
EUR/USD lacks momentum, churns near 1.0750
EUR/USD cycled familiar levels again on Tuesday, testing the waters near 1.0750 as broader markets look for signals to push in either direction. Risk appetite was crimped on Tuesday after Fedspeak from key US Federal Reserve officials threw caution on hopes for approaching rate cuts from the Fed.
Gold wanes as US Dollar soars, unfazed by lower US yields
Gold price slipped during the North American session, dropping around 0.4% amid a strong US Dollar and falling US Treasury bond yields. A scarce economic docket in the United States would keep investors focused on Federal Reserve officials during the week after last Friday’s US employment report.
Solana FireDancer validator launches documentation website, SOL price holds 23% weekly gains
Solana network has been sensational since the fourth quarter (Q4) of 2023, making headlines with a series of successful meme coin launches that outperformed their peers.
Living vicariously through rate cut expectations
U.S. stock indexes made gains on Tuesday as concerns about an overheating U.S. economy ease, particularly with incoming economic reports showing data surprises at their most negative levels since February of last year.