USDJPY maintains a neutral bias in the medium term and has been in a range between 108.00 and 115.00 since April. In the short term, the downside pressure has eased and prices bounced after touching a low of 108.26 last week.
The market has been holding above the year-to-date low of 108.12 which was reached on April 17. To the upside, the market looks capped below the July 11 high of 114.49.
The recovery from the multi-month low of 108.26 is still in progress as USDJPY gained upside momentum, while RSI is rising, breaking above 50 into bullish territory. There is scope to rise toward the mid-August high at 110.94. From here, clearing barriers at the key 111.00 level and 50-day moving average close-by would target 112.50 (200-day MA) ahead of a re-test of 114.49. Prices would need to rise above the top of the range at 115.00 in order to see a shift out of the medium-term neutral phase.
Meanwhile, a firm break of the 108.26 low and strong support at 108.00 would resume the whole corrective decline from 114.49 and shift the trend to bearish.
The underlying trend remains neutral for the medium-term while the short-term downtrend from 114.49 remains intact unless USDJPY moves above 111.00.
