USD/JPY Price Analysis: 100-DMA, around 104.75 is the next relevant bullish target

• USD/JPY edged higher for the fourth consecutive session on Monday.
• The set-up supports prospects for a move towards the 104.75-85 zone.

The USD/JPY pair built on last week’s rebound from the vicinity of multi-month-old descending channel support and gained some follow-through traction on Monday. This marked the fourth consecutive day of a positive move and pushed the pair to one-month tops – levels beyond the 104.00 mark.

Meanwhile, technical indicators on the daily chart have just started moving into the bullish territory and support prospects for an extension of the positive move. The positive outlook is reinforced by the ongoing US dollar recovery amid the increasing likelihood of more US fiscal stimulus.

Hence, a subsequent move towards an important horizontal resistance, around the 104.75-80 area, now looks a distinct possibility. The mentioned barrier coincides with 100-day SMA and is closely followed by the top end of the trend-channel, just ahead of the key 105.00 psychological mark.

A sustained strength beyond will suggest that the USD/JPY pair has bottomed out, paving the way for a further near-term appreciating move. Bulls might then push the USD/JPY pair further toward the 105.55-60 intermediate resistance before eventually aiming to reclaim the 106.00 mark.

On the flip side, immediate support is now pegged near the 103.80 region. Any further decline might now be seen as an opportunity to initiate fresh bullish positions and remain limited near the 103.00 mark. That said, a convincing break below will negate the near-term constructive outlook.

The USD/JPY might then turn vulnerable to resume its recent well-established bearish trend and accelerate the fall back towards challenging the trend-channel support, currently near the 102.35 region.

USD/JPY daily chart

Technical levels to watch