- The USD/JPY pair continued showing some resilience below 200-hour SMA and managed to gain some positive traction on Thursday.
- The prevalent risk-on mood dented the Japanese Yen’s safe-haven status and was seen as one of the key factors lending some support.
Given the overnight bounce from mid-107.00s – also coinciding with Friday’s swing low, the price action suggests that the pair has formed a firm near-term base and might now be looking to extend the recent recovery move from multi-month lows.
Meanwhile, technical indicators on the 1-hourly chart have just started gaining positive momentum but are yet to catch up with the uptick on 4-hourly/daily charts and thus, warrant caution before placing aggressive bets for a further appreciating move.
The overnight swing high, around the 107.85-90 region – nearing 38.2% Fibo. level of the 106.78-108.54 recent up-move, seems to act as an immediate resistance, which if cleared decisively might now be seen as a key trigger for bullish traders.
Beyond the mentioned hurdle, the pair is likely to surpass the 108.00 handle and make a fresh attempt towards clearing the 108.50 supply zone, above which the momentum could further get extended towards reclaiming the 109.00 round figure mark.
On the flip side, a sustained breakthrough mid-107.00s immediate strong support might negate the bullish outlook and accelerate the slide towards the 107.15 intermediate support en-route multi-month lows, around the 106.80-75 region touched last week.
USD/JPY 1-hourly chart
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