USDJPY is turning up, hitting the strong immediate resistance at 135.55, which overlaps with the 40-day simple moving average (SMA).
The pair remains inside the Ichimoku cloud, while the RSI is getting closer to the positive territory and the stochastic oscillator is moving up towards the 80 level after the bullish crossover between the %K and %D lines. Both suggest that the next move may be up instead of down in the near-term.
If the price closes decisively above the 135.55 resistance, the bulls could push up to the 24-year high of 139.35 before testing the psychological level of 140.00.
On the other hand, a drop could hit the support level of 131.35, which the market failed to break below since June. Even lower, the market could try to break through the 130.37 barrier again before falling to the 125.10–126.30 support zone.
Overall, USDJPY needs to climb above the 40-day SMA for a short-term bullish move to be confirmed, while a drop below 130.37 could generate a lower low and change the outlook to bearish.
