- Reviving safe-haven demand underpins JPY and prompts some long-unwinding.
- The set-up remains in favour of bulls and should attract some dip-buying interest.
The USD/JPY pair trimmed a part of its early modest gains to over one-month tops, albeit has still managed to hold its neck comfortably above the 107.00 round figure mark. Given last week's breakthrough the 106.70 heavy supply zone - coinciding with 200-period SMA on the 4-hourly chart - still support prospects for an extension of the recent recovery move from multi-year lows.
Moreover, bullish oscillators on hourly/daily charts further add credence to the constructive outlook, albeit a slight deterioration in the global risk sentiment underpinned the Japanese Yen's relative safe-haven status and kept a lid on any further up-move. The pair stalled its bullish trajectory and witnessed a modest intraday pullback from a resistance marked by 61.8% Fibo. of the 109.32-104.46 downfall.
Any meaningful pullback towards the 107.00 handle might still be seen as an opportunity to initiate some fresh bullish positions and should help limit further downside near the mentioned resistance breakpoint, now turned support near the 106.70 region, which if broken might trigger aggressive technical selling and turn the pair vulnerable to accelerate the slide back towards testing sub-106.00 level.
On the upside, immediate resistance is pegged near mid-107.00s (61.8% Fibo. level), above which the pair seems all set to aim towards reclaiming the 108.00 handle. A follow-through buying will reaffirm the near-term bullish outlook and pave the way for a further near-term appreciating move, possibly beyond the 109.00 round figure mark.
USD/JPY 4-hourly chart
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