USDJPY printed its second day of gains, touching the 109.20 resistance. However, currently, the pair is paring some of these gains, failing to exit the narrow range within the 107.80 support and the 109.20 resistance in the very short-term. Chances for an upside reversal are increasing as the MACD oscillator recorded a bullish cross with its trigger line and the stochastic oscillator is approaching the overbought zone.
Another step higher may reach key resistance at 109.60 – 109.75, which encapsulates the 50.0% Fibonacci retracement level of the downleg from 114.55 to 104.64. Should this prove a weak obstacle, the buying interest could pick up speed until the 110.35 resistance, taken from the low on September 7, where any violation would bring more pressure to the market with the price extending bullish movement until the 61.8% Fibonacci of 110.75. Though only a close above the latter hurdle would confirm a start of an uptrend.
On the other side, in case of a downward pullback, immediate support could come from the 38.2% Fibonacci mark of 108.40 before the focus shifts to the 107.80 – 108.10 strong support area again. Lower, the 23.6% Fibonacci region of 107.00 could also restrict bearish movements.
In the medium-term structure, USDJPY is still increasingly negative as long as it holds below the 20- and 40-simple moving averages (SMAs) in the daily timeframe, and more importantly under the 200-day SMA, which is still marginally rising.
