USDJPY maintains its medium-term trading range between 108 and 114.50 as a result of entering a consolidation phase after a rally to 118.66 in December 2016. The pair is now trading above the mid-point of the range.
USDJPY has been closing above the key 111 in the past two months, making it a strong support level. Breaking below it would shift the focus back to the lower end of the range in the 108 area.
USDJPY firmed up this week after bouncing off the 111 level. The short-term bias improved when prices rose above the 200-day moving average. This level at 111.65 is now expected to provide support.
RSI is ticking higher, suggesting the market has more upside potential in the near term. There is resistance at 112.75 (50-day MA) but pushing above it would help USDJPY see further gains back towards the top of the range at 114.50. This level would be a challenge to break, however, if successful, there is scope to target the 118 level for a re-test of the December 2016 peak.
