USDJPY is trading around the mid-Bollinger band at 113.53, adhering to a two-week price consolidation that evolved after the plunge from the more than four-and-a-half-year high of 115.51. The horizontal demeanour of the simple moving averages (SMAs) is endorsing a trendless market.
Furthermore, the short-term oscillators are reflecting the recent minor increase in positive momentum but are hinting that directional impetus is presently feeble. The flattening of the MACD and its red trigger line, which are barely above the zero threshold, is confirming that directional forces have little power. On the other hand, the rising RSI and the positively charged stochastic oscillator are promoting upside price action.
Nonetheless, the squeeze in the Bollinger bands is suggesting a surge in volatility is due, which conveys the message that a larger price move is expected soon.
If buyers stay ahead, tough resistance could originate from the nearby 113.79-114.06 section, which encompasses the longer-term 100- and 200-period SMAs, and the upper Bollinger band. Successfully surpassing this fortified ceiling, the bulls may propel for the 114.48 and 114.81 inside swing lows from the later part of November before tackling the 115.00 handle.
Otherwise, if sellers take control and drive the price beneath the immediate mid-Bollinger band at 113.53 and the 50-period SMA at 113.44, they could test the lower Bollinger band and the 113.22 low. Moving downwards, the price may snag at the 113.00 hurdle before challenging the 112.53-112.72 support foundation. Should downward pressures overwhelm this critical barrier, the price could dive towards the 112.00 mark before turning its focus to the 111.50 trough, identified on October 8.
Summarizing, USDJPY is consolidating between the lower limit of 112.53-112.72 and the upper limit of 113.79-114.06. A clearer price direction is likely to evolve should the price break either below or above these confines. That said, a break below the 112.53-112.72 base may spark worries about the broader uptrend.
