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USDJPY’s Weekly Bullish Cycle Could Lose Impetus

USDJPY ticked to a fresh 6-month high of 106.73 on Monday, but its weekly bullish cycle seems to be ending as the price is flirting with the topline of the ascending channel.

The flattening RSI and the slowing positive momentum in the MACD also hint that the buying appetite may be losing steam, shifting the spotlight towards the supportive red Tenkan-sen line and the 20-period simple moving average (SMA), both converging at 106.27. A violation of this point could re-challenge the 106.00 round level ahead of the 105.80 barrier and the 50-period SMA.

In the positive scenario, a clear break above the channel could stretch up to the 107.00 number, while even higher the bulls would aim for the 107.500 barrier before they meet the 108.00 mark.

Summarizing, USDJPY is looking cautiously bullish in the short-term picture. Failure to run above the channel could bring the 106.27 area next into view.

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