- USD/JPY added to the previous day’s recovery move from 104.00 mark, or multi-month lows.
- A sustained move above 100-hour SMA might be seen as a trigger for intraday bullish traders.
- Strength beyond the 105.00 mark runs the risk of fizzling out quickly near the 105.30-40 area.
The USD/JPY pair jumped back closer to the overnight swing high, with bulls now eyeing a move towards reclaiming the key 105.00 psychological mark. A sustained strength beyond 100-hour SMA was seen as a key trigger for intraday bullish traders and supports prospects for additional gains.
The intraday positive outlook is reinforced by bullish oscillators on the 1-hourly chart. However, technical indicators on the daily chart are yet to recover from the bearish territory. This, in turn, warrants some caution for bullish traders and before positioning for any further move up.
Hence, the ongoing recovery move might still be categorized as a corrective bounce, which runs the risk of fizzling out rather quickly. Any subsequent move beyond the 105.00 mark might still be seen as a selling opportunity and remain capped near the 105.30-40 strong horizontal support breakpoint.
On the flip side, the 104.40 region now seems to have emerged as immediate support. Failure to defend the mentioned support might be seen as a fresh trigger for bearish traders and drag the pair back towards the 104.00 mark, or over six-month lows touched on Monday.
Some follow-through selling should pave the way for an extension of the recent depreciating move and turn the pair vulnerable to slide towards testing the 103.00 mark. The downward trajectory could further get extended towards March daily closing lows support, near the 102.35 region.
USD/JPY 1-hourly chart