USDJPY is on course to set a bullish day after two straight negative sessions. The price surpassed the moving averages in the previous week and challenged a fresh six-week high of 111.12 before the slip to the 20-day simple moving average (SMA). The momentum indicators are supportive of the neutral to bullish picture in the near-term.

Technically, the RSI indicator is sloping slightly to the upside in the positive territory, while the MACD oscillator is flattening above the zero line and near its red-trigger line.

Should the market edge higher, resistance could be met between the 111.12 resistance level and the 111.40 barrier. Slightly higher the 50.0% Fibonacci mark near 111.60 could be in focus. A leg above this area could send prices towards the 112.00 psychological barrier, which currently is in the path of the descending trend line of the longer-term falling sloping channel. In case of an upside violation of this level, it could shift the bearish bias to bullish.

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However, if the pair records some losses and closes below the 38.2% Fibonacci, support could be met at the 109.35 hurdle. A dive below this level could drive the pair until the 108.65 obstacle, taken from the low on May 4.

Having a look at the bigger picture, USDJPY has been trading within a descending sloping channel since December 2016, while in the medium-term the market holds in an ascending movement after the rebound on the 104.60 support.


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