USDJPY has recently regained its buoyancy with a bounce off the base of 113.00-113.25, but bullish forces are looking vulnerable around the upper Bollinger band at 114.36 and ahead of the near 4-year high of 114.69. The 50-period simple moving average (SMA) is exhibiting a slight preference to the upside, while the advancing longer-term SMAs are endorsing the positive trend in the pair.
The short-term oscillators are reflecting conflicting messages in directional impetus. The falling RSI and stochastic lines are suggesting negative price action is increasing, while the MACD is strengthening above its red trigger line in the positive region.
If bullish potency diminishes, the pair could meet initial downside constraints around the 114.00 handle. If USDJPY continues to show signs of positive waning, the pair may encounter a zone of support from the 50-period SMA at 113.85 until the 100-period SMA at 113.74. Should the 100-period SMA fail to defend the positive structure, the price could drop towards the 113.38 level, bordering the lower Bollinger band, the former being the 23.6% Fibonacci retracement of the up leg from 109.11 until 114.69. In the event the price sinks beneath the key buffer zone of 113.00-113.25, sellers may target the 38.2% Fibo of 112.56 before their focus turns to the 112.00-112.22 reinforced support boundary.
Otherwise, if buying interest intensifies, the upper Bollinger band at 114.36 could delay the test of the 114.54-114.73 resistance band, shaped between the rally peaks of October 2018 and November 2017. Moving higher, the 114.88 and 115.19 barriers in March 2017 could come under fire. Leaving the 115.00 hurdle in the rear mirror, buyers could then challenge the 115.50-115.62 resistance belt formed by the highs of March and January of 2017.
Summarizing, USDJPY is exhibiting some weakness in upside momentum, showing a possible retest of the 114.00 mark and the 50- and 100-period SMAs. Nonetheless, the pair’s bullish bearing remains intact above the 113.00-113.25 foundation.
