- The USD/JPY pair regained positive traction on Wednesday - marking the fourth day of an uptick in the previous five - and recovered a major part of the overnight modest pullback.
- The intraday up-move is now testing a key resistance marked by 100-period EMA on the 4-hourly chart, which if cleared might be seen as a key trigger for short-term bullish traders.
Meanwhile, technical indicators on the daily chart have been recovering from the negative territory and maintained their bullish bias on hourly charts, supporting prospects for an extension of the recovery move from multi-month lows set last week.
A sustained breakthrough the mentioned barrier will reinforce the bullish bias and set the stage for a move beyond the 107.00 handle towards testing the 107.20 region - a resistance marked by 50% Fibo. level of the 109.32-105.05 recent downfall.
The momentum could further get extended towards mid-107.000s en-route 61.8% Fibo. level - around the 107.70-75 region - which if cleared might negate any near-term bearish bias and lift the pair further towards the 108.00 round figure mark ahead of the 108.45-50 supply zone.
On the flip side, the 106.20 horizontal zone now seems to have emerged as an immediate strong support, below which the pair might turn vulnerable to head back towards challenging the 105.00 round figure mark with some intermediate support near the 105.65 region.
USD/JPY 4-hourly chart
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