USD/JPY Price Analysis: Clings to strong gains near 23.6% Fibo. level, around 107.30 region
- USD/JPY edged higher for the third consecutive session on Monday.
- The technical set-up gradually moving back in favour of bullish traders.
The USD/JPY pair built on last week's modest bounce from multi-week lows and gained some strong positive traction for the third straight session on Monday. A sustained strength beyond a one-month-old descending trend-line was seen as a key trigger for bullish traders and lifted the pair further beyond the 107.00 round-figure mark.
The pair was last seen hovering around the 23.6% Fibonacci level of the 111.72-105.99 downfall, which is closely followed by 50-day SMA, around the 107.55-60 region. Some follow-through buying will add credence to the descending trend-line breakout and set the stage for a further near-term appreciating move amid resurgent USD demand.
Meanwhile, technical indicators on the daily chart are yet to catch up with the ongoing positive move and warrant some caution before placing any aggressive bullish bets. Hence, it will be prudent to wait for a convincing break through the mentioned barrier, above which the pair is likely to accelerate the momentum towards the 108.00 mark.
The latter coincides with a resistance marked by 38.2% Fibo. level, which if cleared might be seen as a fresh trigger for bullish traders and set the stage for an extension of the recovery momentum. The pair might then aim towards reclaiming the 109.00 round-figure mark with some intermediate resistance near 50% Fibo. level, around the 108.80 region.
On the flip side, the 107.00 round-figure mark now seems to protect the immediate downside. Any subsequent fall might attract some dip-buying, rather remain limited near the mentioned trend-line resistance breakpoint, now turned support, which is currently pegged near the 106.65 region.
USD/JPY daily chart
