USD/JPY Technical Analysis: Eyes confluence of 50-day MA and trendline hurdle

• Having defended the rising (bullish) 100-day MA and neutral 200-day MA support in the previous two trading days, the USD/JPY is looking north and aiming for 111.02 – resistance of trendline sloping downwards from the Aug. 1 high and Aug. 15 high and 50-day MA.
• The Fed minutes released yesterday revealed the policymakers are set to follow the gradual policy tightening path, meaning the yield differential is set to widen further in favor of the USD.
• That said, as of writing, the path of least resistance for the 10-year US-Japan yield spread is to the downside, as indicated by the head-and-shoulders breakdown. As a result, the pair may find it hard to scale the immediate resistance located at 111.02.

Hourly chart

Daily chart

Spot Rate: 110.80

Daily High: 110.89

Daily Low: 110.52

Trend: Bullish

Resistance

R1: 111.02 (trendline hurdle + 50-day MA)

R2: 111.43 (Aug. 15 high)

R3: 112.15 (Aug. 1 high)

Support

S1: 110.65 (10-day MA)

S2: 110.43 (100-hour MA)

S3: 110.07 (100-day MA)