USDJPY has been trending very positively over the past three weeks and is set to close higher for another week. On Thursday the pair hit 11-month highs at 114.54, though it soon returned below the 114.00 round level, with the RSI, Stochastics and the MACD turning weaker, a sign that the spectacular rally could lose steam in the short-term. The (simple) 20- and the 50-day moving average lines, however, continue to strengthen, hinting that the upside trend is likely to stay in place.
Should the price head south, the 113.16 top on July 19 could be a potential support to keep in mind ahead of the 113.00 key level. A break below the latter may increase speculation that the recent rally has reached its peak and is time for the bears to take control, with traders probably looking next to 112.14, the August high. Lower than that, the resistance area between 111.82 and 111.38 could be another barrier in focus.
Alternatively, if the price resumes a bullish mode above 114.00, the bulls are expected to retest Thursday’s high of 114.54. In case this proves a weak obstacle too, a wall may be found around the 115.50 where the price paused on March 2017. Even higher, the door could open for the August 2017 high of 117.52.
In the medium-term picture, USDJPY maintains its bullish profile above the 113.16 high and should the shorter-term moving averages continue to move positively above the longer-term MAs the bullish outlook is likely to hold for longer
