USD/JPY Technical Analysis: Set-up favours bullish traders, move beyond 109.00 mark awaited

The USD/JPY pair caught some fresh bids on the first day of a new trading week and finally broke through its recent range-bound price action between two converging trend-lines, which constituted towards the formation of a symmetrical triangle on the daily chart.

Against the backdrop of the pair's recent strong recovery from multi-year lows, the mentioned triangle further collaborated towards the formation of a bullish pennant chart pattern and support prospects for a further appreciating move amid renewed US-China trade optimism.

Meanwhile, technical indicators on the mentioned chart have again started gaining positive traction and further reinforce the constructive set-up, albeit traders are likely to wait for a sustained move beyond the very important 200-day SMA before placing any fresh bullish bets.

Some follow-through buying beyond the mentioned barrier, currently near the 109.00 handle for a move towards retesting monthly swing highs, around mid-109.00s, before the pair eventually aims towards reclaiming the key 110.00 psychological mark.

On the flip side, immediate support is pegged near the 108.70-60 region and is closely followed by the lower end of the symmetrical triangle, around the 108.35-30 region, which if broken might negate any near-term bullish bias and prompt some aggressive selling.

The pair then could slide further towards testing sub-108.00 levels (monthly lows), below which the downward trajectory could further get extended towards its next major support near the 107.00 round-figure mark with some intermediate support near the 107.55 region.

USD/JPY daily chart