USD/JPY Price Analysis: Refreshes daily tops, bulls challenge 200-hour SMA

• USD/JPY attracts some dip-buying near 107.30 area and refreshes session tops.
• The technical set-up favours bulls and supports prospects for additional gains.

The USD/JPY pair reversed an early dip to the 107.30 region and refreshed daily tops during the early North-American session, albeit struggled to make it through 200-hour SMA.

Given last week’s sustained move beyond a 3-1/2-week-old descending trend-line, the emergence of dip-buying supports prospects for a further near-term appreciating move.

The constructive outlook is further supported by sustained buying around the USD and reinforced by the fact that oscillators on the 1-hourly chart have been gaining some traction.

Meanwhile, technical indicators on 4-hourly/daily charts are yet to gain any meaningful positive momentum and thus, warrant some caution before placing aggressive bullish bets.

Hence, it will be prudent to wait for some follow-through strength beyond the 107.80 region (200-hour SMA) to confirm the near-term bullish bias amid the prevailing risk-off mood.

Any subsequent move up is likely to confront a stiff resistance near the 108.00-108.10 region, above which the pair seems all set to aim towards reclaiming the 109.00 round-figure mark.

On the flip side, the 107.30 horizontal zone might continue to protect the immediate downside, which is followed by monthly lows support near the 106.95-90 region.

Failure to defend the mentioned support levels might prompt some aggressive technical selling and turn the pair vulnerable to test sub-106.00 levels in the near-term.

USD/JPY 1-hourly chart

Technical levels to watch