USDJPY has edged beneath the waning 50-period simple moving average (SMA) at 109.00 and into the Ichimoku cloud, after the impressive rally from 104.91 struggled to extend past the 109.20-109.37 resistance region. The directionless Ichimoku lines are promoting the minor consolidation, while the SMAs are endorsing a positive price structure.
The short-term oscillators are transmitting conflicting signals in directional momentum. The MACD, barely below its red trigger line and the zero mark, is falling, while the downward pointing RSI is below the 50 threshold and is persisting underneath a resistance line. However, the positively charged stochastic oscillator has made a base and is sponsoring positive sentiment.
If sellers remain in control, initial downside limitations may commence from the 108.52 low ahead of the vital support section of 108.09-108.35, which also contains the 100-period SMA. Successfully diving beneath the cloud, the bears may examine the next area of support between the 107.81 mark and the 107.67 level, the latter being the 38.2% Fibonacci retracement of the up leg from 104.91 to 109.37. Plunging from here, the bears may then target the 50.0% Fibo of 107.15.
Otherwise, if buyers retake the reins, early resistance may develop from the red Tenkan-sen line at 108.82 until the 50-period SMA at 109.00. Stepping over this, the ceiling of the consolidation of 109.20-109.37 may prove to be a heavy boundary to overcome. Yet, if it fails to cap the climb, the bulls may propel to the 109.58 high and the peak of 109.85, both identified in June 2020. Extending even further, the strong border at 110.08 could finally step on the brakes.
Summarizing, USDJPY is sustaining a bullish tone above the 108.09-108.35 boundary despite its recent ranging and weakening appearance.
