USDJPY buyers have emerged within the 109.66-109.84 zone (previous resistance-now-support) to contest the price pullback off a 1-year high of 110.96. The soaring 50- and 100-day simple moving averages (SMAs) are defending the near three-month rally off the 102.58 level, while a near completion of a bullish crossover of the 200-day SMA could further boost this outlook.
The advancing Ichimoku lines suggest that positive sentiment remains potent, opposing the minor price correction, while the short-term oscillators are reflecting mixed signals in directional momentum. The MACD is far above the zero mark although has slid below its red trigger line, while the RSI is disputing its decline in the bullish region.
If buyers mould stable footing in this key support belt, initial upside constraints may come from the red Tenkan-sen line at 110.04 before this traction lifts the price to challenge the resistance boundary located between 110.74 and 110.96. Successfully resuming the climb may then propel the pair towards the critical 111.71 high. Overshooting this too, the vital resistance section of 112.22-112.40, involving a 10-month peak and that identified in April 2019 could draw traders’ attention.
If the pair redirects below the 109.66 frontier, early downside limitations could develop from the 109.23-109.36 region. Sinking from here, next critical support may emerge from the 108.16-108.40 zone and the tentative uptrend line, pulled from the 102.58 low. A downside violation of these obstacles could then meet the 50-day SMA and the 107.53 barrier.
Summarizing, a dive beneath the 109.23-109.36 support could create doubt in the rally. Furthermore, to undermine the strong bullish picture, the price would need to correct below the 108.16-108.40 support and the supportive trend line.
