USDJPY has been gradually recovering within a symmetrical triangle over the past two weeks, but it was unable to close decisively above the 110.00 level.
Having stepped on the 20-day simple moving average (SMA) and jumped into the upper bullish Bollinger band area, the price is currently looking for the opportunity to break the surface of the triangle formation, which could consequently bolster buying forces above the 110.00 number and towards the 110.70 – 111.00 resistance area. Note that the levels coincide with the 61.8% and 78.6% Fibonacci retracement levels of the 111.65 – 108.71 downfall. Even higher, the pair could sail towards the 111.65 top and then attempt to overcome the 2020 high of 112.21.
The upward slope in the RSI, which has pierced above its 50 neutral mark, is an encouraging indication that positive momentum could persist. That said, the indicator continues to trade within a range below its August high. Therefore, fresh higher highs might be required to confirm a bullish bias. Likewise, the MACD, having barely stepped into the positive area, has yet to show a clear direction.
On the downside, a close below the triangle could power selling pressures towards the 23.6% Fibonacci of 109.40 and the 109.10 support zone. Should the bears clear the 108.71 – 108.35 floor too, the pair could plunge towards the April low of 107.47.
All in all, traders appear to be indecisive in the USDJPY market so far, waiting for a move above or below the triangle to adjust their exposure accordingly.
