USDJPY has been in a negative direction over the last six months, however, the rebound at the six-month low of 104.00 drove the pair higher, finding strong resistance at the 40-day simple moving average (SMA) and the 105.80 resistance. The latter level is the 23.6% Fibonacci retracement level of the down leg from 111.70 to 104.00.
The momentum indicators are hinting at neutral movement as the MACD is gaining some ground above its trigger line but near its zero level and the RSI is flattening around the neutral threshold of 50. The moving averages are still suggesting a bearish mode.
A pullback on the 40-day SMA could send the market down again, touching the 104.15-104.00 significant support area. Breaching these levels, the price could challenge 103.10, taken from the low on March 12 before meeting the 41-month trough of 101.15.
Summarizing, the market is endorsing the negative bias and only an increase above the descending trend line around the 38.2% Fibonacci of 106.95 may change this outlook to neutral-to-bullish.
