USDJPY has reversed back up again, above 107.00, after finding support at the eight-week low of 105.95 achieved last week. The price is in the process of penetrating the downward sloping channel to the upside, shifting the bearish structure to neutral.
The price is ready to touch the 23.6% Fibonacci retracement level of the down leg from 111.70 to 105.95 at 107.33 and the 107.50 resistance, remaining above the short-term simple moving averages (SMAs). Furthermore, the technical indicators are confirming this view with the RSI approaching the 70 level and the stochastic hovering in the overbought zone. More gains could send prices towards the 38.2% Fibonacci at 108.16 and the 50.0% Fibonacci of 108.80.
In the negative scenario, with a drop beneath the 100-period SMA, immediate support could be faced from the 40- and 20-period SMAs currently at 106.60 and 106.45 respectively, in the 4-hour chart. Breaching these lines, support could come from the eight-week low at 105.95 ahead of the 105.20 barrier, identified by the trough on March 16.
Summarizing, USDJPY is moving higher near the upper boundary of the descending channel with momentum indicators signaling more upside pressure in the near term.
