- Bulls failed to capitalize on the overnight strong up-move to weekly tops.
- The intraday pullback seems to have found support near 100-hour SMA.
The USD/JPY pair traded with a mild negative bias through the European session on Thursday but now seems to have found some support near 100-hour SMA. This is closely followed by a support marked by the lower end of a descending trend-channel formation on intraday charts.
Given the overnight goodish up-move to weekly tops, the mentioned trend-channel now seemed to constitute towards the formation of a bullish continuation – flag chart pattern – and support prospects for a further near-term appreciating move amid renewed US-China trade optimism.
Meanwhile, technical indicators on hourly charts have been drifting lower but are yet to gather any meaningful negative momentum. This coupled with the fact that oscillators on the daily chart are still holding in the bulls territory points further reinforce the constructive set-up.
Hence, any subsequent pullback seems more likely to attract some meaningful dip-buying interest near the trend-channel support – around mid-107.00s. Failure to defend the mentioned support might negate the bullish bias and accelerate the slide back towards the 107.00 handle.
On the flip side, the 107.70 region (the top end of the mentioned descending channel) now seems to act as an immediate resistance, above which the pair seems all set to surpass the 108.00 handle and aim back towards challenging monthly swing highs near the 108.45-50 region.
USD/JPY 1-hourly chart
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