- The pair showed some resilience below 50% Fibo. level.
- Set-up support prospects for some dip-buying interest.
The USD/JPY pair stalled its recent pullback from the vicinity of the 109.00 handle, or 2-1/2 month tops, and managed to regain some positive traction on the first day of a new trading week.
The pair showed some resilience below 50% Fibonacci level of the 112.40-104.45 downfall, which is closely followed by a five-month-old descending trend-line resistance breakpoint near the 108.00 mark.
Given that the pair's recent failure just ahead of the very important 200-day SMA, weakness below the mentioned handle is likely to accelerate the slide further towards the 107.55 confluence support.
The latter comprises of 100-day SMA and 38.2% Fibo. level, which if broken decisively might negate any near-term bullish bias and set the stage for a further near-term depreciating move.
Meanwhile, technical indicators on hourly/daily charts have been drifting lower but remained well within the bullish territory, supporting prospects for the emergence of some dip-buying interest.
Hence, it will be prudent to wait for a sustained breakthrough the said confluence support before traders again start positioning for the resumption of the pair's prior well-established bearish trend.
On the flip side, any attempted positive move might continue to confront some fresh supply near the 109.00 handle (200-DMA), which if cleared now seems to pave the way for additional near-term gains.
USD/JPY daily chart
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