USDJPY is losing some ground after the sharp jump in the previous days towards a three-week high of 113.40, reached on Wednesday. It’s noteworthy that the price successfully surpassed the 20- and 40-simple moving averages (SMAs) but created a bearish crossover in the daily timeframe, indicating a possible negative retracement.
Zooming into the technical indicators, the RSI indicator is moving slightly to the downside in the positive territory, while the MACD oscillator climbed marginally above the trigger and zero line, suggesting weak momentum in the near term.
In case of a continuation of the downward correction mode, the pair could challenge the bearish crossover within the SMAs around 112.50, before heading lower towards the 23.6% Fibonacci retracement level of the upleg from 104.60 to 114.55 of 112.20. Strong support could be found on the upside of the diagonal line marginally below the latter level. A drop below this barrier could shift the positive bias to a more neutral one, breaking the ascending line and touching the 111.40 support level.
However, if the price rebounds on the SMAs and then surpasses the 113.40 key level, this could open the door for the 11-month high of 114.55 resistance hurdle, achieved on October 3. Above this obstacle the pair could hit 115.50, identified by the high on March 5.
Overall, USDJPY maintains a bullish outlook as it remains above the rising trend line over the last seven months, during which it has been creating higher highs and higher lows.
