- USD/JPY regains traction on the first day of the week, albeit lacked any strong follow-through.
- The set-up supports prospects for an eventual bullish break through the recent trading range.
The USD/JPY pair held on its modest daily gains through the early North American session and was last seen trading near the top end of its daily trading range, around the 107.70 region.
The uptick, however, lacked any strong follow-through, with bulls still awaiting a sustained breakthrough the 50-day SMA barrier. The mentioned hurdle is closely followed by over one-month highs set last Tuesday, around the 108.10 region, which should act as a key pivotal point for the pair’s next leg of a directional move.
Looking at the broader picture, the recent pullbacks over the past two weeks or so managed to attract some dip-buying near 200-hour SMA. This coupled with bullish technical indicators on the daily chart – though have been struggling to gain any meaningful traction – supports prospects for an eventual bullish breakout.
The pair might then aim to surpass the 108.75-80 intermediate resistance and reclaim the 109.00 round-figure mark. The momentum could further get extended towards early April swing highs, around the 109.35-40 supply zone. A convincing breakthrough the mentioned barriers might be seen as a fresh trigger for bullish traders.
On the flip side, any meaningful pullback might continue to find some support near 200-hour SMA, which currently stands near the 107.40 region, which if broken decisively will negate the near-term bullish bias. Some follow-through selling might turn the pair vulnerable to break below the 107.00 mark and test the 106.60-50 support area.
USD/JPY 1-hourly chart
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Technical level to watch
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