USDJPY is neutral both in the short- and medium-term. A broad range of (roughly) 108 and 114 has been formed since March and this is highlighted by a lack of direction in the major moving averages (50,100 and 200-day). Price action in the near-term since September 20 shows a consolidation range between 111.46 and 113.43.
USDJPY is currently trading in the upper end of the broader range. Short-term downward pressure has weakened and there is a positive undertone in the market as indicated by the RSI and MACD (both in bullish territory).
Support is being provided by the 200-day MA, currently at 111.75. Dropping below this would target the mid-point of the medium-term range at the key 111 level. Further weakness would push prices towards the lower end of the range at 108. Based on price action during the past six months, this area has been rejected, thus making it a strong support level. A drop below it would change the broader trend to bearish from neutral.
USDJPY has been firm in the past couple of sessions with risk clearly tilted to the upside. Breaking out of the 114 level and top of the range area would give scope to target the 118.66 peak from December 2016. Such a move would change the broader trend to bullish.
Despite the current positive tone in USDJPY, the short- and medium-term trend remains neutral
