- The USD/JPY pair regained positive traction on the last trading day of the week and is currently placed at the top end of its weekly trading range, above mid-106.00s.
- The uptick has now lifted the pair above a key pivotal point near 100-period EMA on the 4-hourly chart, which should be seen as a key trigger for bullish traders.
Meanwhile, technical indicators on the daily chart have been recovering from the bearish territory and gaining some positive traction on hourly charts, supporting prospects for an extension of the recent recovery move from multi-month lows set last week.
Sustained breakthrough the 106.70 region – coinciding with 38.2% Fibo. level of the 109.32-105.05 recent downfall – will reaffirm the bullish outlook and set the stage for a move back towards reclaiming the 107.00 handle en-route the 107.20 resistance level.
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 will negate any bearish bias and lift the pair further beyond the 108.00 handle – towards the 108.45-50 supply zone.
On the flip side, the 106.20-15 horizontal zone might continue to protect the immediate downside, below which the pair might turn vulnerable to head back towards challenging the 105.00 handle with some intermediate support near the 105.65 region.
USD/JPY 4-hourly chart
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