USDJPY surged above the 109.50 price level during today’s European session and is trying to enter again into the symmetrical triangle that has been holding since June 2015 in the medium-term timeframe. The short-term technicals are bullish and point to more strength in the market.
From the technical point of view, in the daily timeframe, the RSI indicator rebounded from the oversold area and is currently sloping to the upside, indicating further gains. The stochastic oscillator is moving higher approaching the positive territory.
In case of further bullish movement, the next level to have in mind is the 110.10 resistance level. Rising above this area could shift the focus to the upside towards the 111.50 barrier. As a side note, the price needs to surpass the mid-level of the Bollinger band, which stands near the 110.50 price level, to hit the aforementioned barrier. Breaking 111.50 could see a re-test of the descending trend line.
However, the expectation is a touch of the 110.10 resistance level and then create a bearish movement. Downside moves below 108.20 and the lower band of the Bollinger band could help the price to create a resumption of the downtrend and put in place a lower low at 107.20. From there, USDJPY would be on the path to slip even lower at 105.50.
Overall, the bigger picture remains bearish and the selling pressure is still very strong.