- USD/JPY showed resilience below the 104.00 mark and attracted some dip-buying on Monday.
- Intraday set-up favours bullish traders, through oscillators on the daily chart warrant caution.
The USD/JPY pair built on its intraday positive move from sub-104.00 level and refreshed daily tops during the mid-European session. The uptick, however, lacked any strong follow-through, with bulls struggling to capitalize on the move beyond 200-hour SMA.
The mentioned level is currently pegged near the 104.20-25 region, which coincides with the 50% Fibonacci level of the 104.75-103.67 recent leg down and should act as a key pivotal point. This, in turn, should help determine the USD/JPY pair’s intraday trajectory.
Meanwhile, technical indicators on hourly charts have just started moving into the positive territory and support prospects for additional gains. However, oscillators on the daily chart are yet to confirm the constructive outlook and warrant caution for bullish traders.
This makes it prudent to wait for a sustained move beyond the 61.8% Fibo. level, around the 104.35 zone, before positioning for any further move up. The USD/JPY pair might then accelerate the momentum towards the 104.75 supply zone en-route the key 105.00 psychological mark.
On the flip side, the 38.2% Fibo. level, around the 104.10-05 region, now seems to protect the immediate downside. This is closely followed by daily lows, around the 103.95 region, which if broken decisively would negate any near-term positive bias.
USD/JPY 1-hourly chart
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Technical levels to watch
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