USDJPY has found strong support level at 112.70 over the last few days, remaining below the flat 20- and 40-day simple moving averages (SMAs). However, the pair is moving sideways within this range and is confirmed from the technical indicators as well. The MACD is moving sideways below zero level, while the RSI is flattening near its neutral threshold of 50.
In the case of a break beyond the short-term SMAs, the next stop could come from the almost five-year high of 115.50. A rally higher could send the market towards a key barrier, registered in December 2016 at 118.60.
Alternatively, a move beneath the 112.70 could take the price towards the 112.07, which is an inside swing high from September 30. Below these obstacles, the bears may challenge the long-term ascending trend line around 111.50 ahead of the start of a bearish structure, hitting 110.80.
All in all, USDJPY is neutral in the near-term but the broader outlook is strongly bullish. A decline below the uptrend line may shift the picture to neutral-to-bearish.