USDJPY has been moving sideways since March, in a broad range between 108 to 114. In the near term, the pair has firmed up after breaking above the 50-day moving average yesterday.
If there is continued upside momentum, then additional gains are likely, with scope to target the top of the range. However, the level at 114 will likely be challenging to break as it is seen as a strong resistance level. From this breakout point, a strong rally is expected towards the prior high of 114.73.
Failure to rise above 114 in the short term would see a reversal back down but support is expected at the 50-day MA around 112.90. The bullishly aligned 50 and 200-day moving averages are painting a positive picture overall. USDJPY is short-term bullish, while RSI is above 50.
The market is expected to trade sideways likely between 112 and 114 for now. There is no change to the medium-term neutral outlook.
