- USD/JPY gains some positive traction for the second straight session on Tuesday.
- Bulls are likely to wait for a sustained strength beyond the key 50-day SMA barrier.
- The downside is likely to remain cushioned near 200-hour SMA, near 107.00 mark.
The USD/JPY pair built on last week’s bounce from 200-hour SMA and edged higher for the second straight session on Tuesday. The uptick also marks the third day of a positive move in the previous four and lifted the pair to one-week tops, just above mid-107.00s.
Despite the uptick, the pair remains well within last week’s broader trading range and below 50-day SMA. The set-up warrants some caution before positioning for any further near-term appreciating move amid the prevalent selling bias surrounding the greenback.
Meanwhile, bullish technical indicators on hourly charts support prospects for some additional gains. However, mixed oscillators on the daily chart are yet to confirm the bullish bias, also making it prudent to wait for some strong follow-through buying interest.
Bulls are likely to aim for a sustained breakthrough 50-day SMA hurdle near the 107.75 region, above which the pair seems more likely to test the 108.05-10 heavy supply zone. The momentum could further get extended towards the next major hurdle near the 108.75-80 region.
On the flip side, the 107.35 horizontal level now seems to protect the immediate downside and is followed by the 107.00 mark. The latter coincides with 200-hour SMA, which if broken might be seen as a fresh trigger for bearish traders and turn the pair vulnerable.
A convincing break below the 106.75 horizontal support will reinforce the bearish break and set the stage for a fall back towards challenging the 106.00 round-figure mark.
USD/JPY 1-hourly chart
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Technical levels to watch
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