USDJPY is still in a bullish phase in the short term after rebounding off the key 108-area which was the bottom of the medium-term range in which the pair has been trading in since April. Prices are now approaching the top of the range at 114.
The short-term bias remains bullish. The rising momentum oscillators (RSI and MACD) give room for more upside. Meanwhile, USDJPY broke above the 200-day moving average, giving a bullish signal.
Resistance is likely to be strong at 114. A push above the July 11 high of 114.49 is needed to see increased momentum to the upside to target the next peak at 115.50 from March 10. From here, the next peak at 118.66 comes into view, the highest since January 16.
Should USDJPY fail to break resistance at 114 and turn back down, then support is expected to be provided by the 200-day moving average and by the top of the cloud (currently at 112 and 111.50 respectively) before targeting major support at 108. A break below this level would push the price out of the range and would shift the medium-term bias from neutral to bearish.
The Ichimoku cloud has been moving sideways since February, highlighting the neutral medium-term picture. In the short term, a bullish signal was given when the market rose above the cloud. The Tenkan-sen is above the Kijun-sen line, which is also a bullish signal.
