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  • USD/JPY opens on a positive note in the early Asian session.
  • Likely to see uptrend if price stays above 38.2% Fibonacci retracement.
  • Neutral MACD asks for a wait-and-watch approach before placing any aggressive bids.

The USD/JPY pair erases part of its previous day’s losses and trades steady in the early Asian session.

At the time of writing, the USD/JPY pair is trading at 109.21, up 0.01% on the day.

USD/JPY 4-hour chart

On the 4-hour chart, the pair has been accumulating gains in the vicinity of the previous day’s close at 109.21. The formation of the Doji candlestick suggests that market participants remain indecisive about the direction of price movements, and wait for a confirmation before placing any directional bet. The pair respects the 50% Fibonacci retracement level near 109.10, which t is drawn from the May 7th lows at 108.33.

If price makes a sustained move above the 38.2% Fibonacci retracement, then it has the potential to crawl back to the 20-hour Simple Moving Average (SMA) at 109.41, creating a path to Thursday’s high at 109.78.

The Moving Average Convergence Divergence (MACD) indicator reads above the midline, with receding bullish momentum. Any uptick could invite USD/JPY to test the horizontal resistance level at 110.

Alternatively, if price breaks the 50% Fibonacci retracement level at 109.10 decisively, then it could open the gates for 108.80 at the 61.8% Fibonacci retracement level, which would also mark the reversal of the prevailing trend. If USD/JPY continues down this trend, price would navigate to the 108.50 horizontal support level, followed by the April 27 low at 108.08.  

USD/JPY Additional Levels

 

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