USDJPY has further nourished its well-established zig zag course along the key ascending trendline, with the price finally surpassing the tough 110.95 peak to unlock an almost 1½-year high of 111.65 before sliding lower again.
Another upside reversal could develop in the near term as the blue Kijun-sen line and the 20-day simple moving average (SMA) are currently cementing the floor around the trendline and the 110.40 level. Still, with the MACD decelerating below its red signal line and the RSI having snapped its previous upward pattern, some caution is warranted.
A close below the trendline is expected to trigger the next bearish round, bringing the 50-day SMA at 109.73 first into view. The bottom of the Ichomoku cloud could follow on the downside at 109.10 but should it fail to act, the sell-off could get extra legs towards the protective 108.55 – 108.32 area.
If the trendline holds robust once again, sending the price above the 110.95 peak, the bulls may attempt to overcome the 2020 limitations within the 111.70 – 112.21 region. A step above the latter could open the door for the 113.00 number for the first time since 2018.
In brief, USDJPY is still in a clear bullish trend, keeping sentiment positive, though given the deterioration in technical oscillators, downside pressures could become more challenging in the short term.
