Despite facing strong resistance of the 55-, 100– and 200-hour SMAs near 109.40, bulls managed to gather enough strength to push USD/JPY above this level on Monday. This breakout provided additional bullish momentum, as the US Dollar subsequently surged as high as the 109.90 mark where a two-week trend-line is located.
The following hours will be important to determine the pair’s further direction. A successful breakout of this level should result in further appreciation up to the 110.20/40 area where the 61.80% Fibonacci retracement is located.
On the other hand, a bearish reversal is expected to result in a test of the aforementioned SMAs and the weekly PP near 109.50. A decline below this area is not expected to follow.
