- Barring an early Asian session dip, the USD/JPY pair remained well within a two-day-old narrow trading band as traders awaited this week’s key central bank meetings – BoJ and the Fed.
- The fact that the pair has managed to hold comfortably above its important intraday moving averages – 100 & 200-hour SMAs, support prospects for further near-term up-move.
With technical indicators on hourly/daily charts holding with a mild positive bias, the pair seems all set to break out of the recent trading range and aim towards resting monthly tops – around the 109.00 round figure mark.
A follow-through buying beyond the 109.20-25 resistance might trigger some additional short-covering rally and lift the pair further towards reclaiming the key 110.00 psychological mark en-route the 110.40-50 supply zone.
On the flip side, sustained weakness below the 108.35-30 region – coinciding with 50-day SMA, might negate the constructive outlook and turn the pair vulnerable to slide back below the 108.00 handle towards testing the 107.70-60 horizontal support.
This is followed by support near the 107.35-30 region, which if broken decisively should pave the way for the resumption of the prior bearish trend and drag the pair back towards challenging multi-month lows – around the 106.80-75 area.
USD/JPY 1-hourly chart
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