- USD/JPY gains some follow-through traction amid renewed trade optimism.
- The downside is likely to remain limited near 108.60-50 confluence support.
The USD/JPY pair added to the overnight goodish intraday recovery gains from two-week lows and edged higher through the early European session on Thursday.
The prevalent risk-on mood, supported by renewed US-China trade optimism, continued weighing on the Japanese Yen’s safe-haven status and remained supportive.
Bulls are now looking to extend the momentum beyond the very important 200-day SMA, and the 109.00 handle before positioning for any further appreciating move.
Meanwhile, bullish technical indicators on the 1-hourly chart support prospects for additional gains, albeit mixed oscillators on 4-hourly/daily charts warrant some caution.
Hence, it will be prudent to wait for some strong follow-through buying beyond the mentioned handle to confirm a move back towards the 109.70-75 region, recent swing high.
On the flip side, immediate support is pegged near the 108.60-50 confluence region, comprising of 50-day SMA and a one-month-old ascending trend-line.
Failure to defend the said support might negate any near-term bullish outlook and prompt some aggressive selling, dragging the pair further towards sub-108.00 levels.
USD/JPY daily chart
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