The USDJPY is standing at the back foot in early European trading on Thursday after long-legged Doji on Wednesday signaled that previous day’s strong rally lost traction.
Near-term action is underpinned by a bear-trap under 110.94 (Fibo 38.2% of 109.11/112.07 rally, formed on Mon/Tue), as well as overall bullish picture on daily chart that keeps focus shifted to the upside for now.
The dollar did not react much on upbeat US private sector jobs data released on Wednesday and traders eye releases of US weekly jobless claims (today) and US Sep NFP (Friday) for more signals.
Near-term action so far stays above initial support, rising 10DMA (111.25) that keeps fresh bulls off Monday’s higher low at 110.82 intact, however, further easing cannot be ruled out as 4-hr studies are weakening.
Near-term bias is expected to remain with bulls while the action holds above 111.00 support zone that would keep in play hopes for renewed attack at key barriers at 112.07 (2021 high), 112.22 (202 high), and 112.40 (2019 high).
Caution on possible drop and close below 111 zone that would complete failure swing pattern on daily chart and signal reversal of the 109.11/112.07 uptrend.
Res: 111.51, 111.78, 112.07, 112.22.
Sup: 111.20, 110.94, 110.82, 110.59.
