USDJPY decreased yesterday after the aggressive upside spike to a new nine-month high of 109.22. Currently, the price is still developing below the 109.00 psychological level, but the bias is bullish in the short-term timeframe. The 40-day simple moving average (SMA) is ready to post a bullish crossover with the 200-day SMA, suggesting more losses.
Technically, the RSI indicator is holding in the overbought territory with weaker momentum than before, while the MACD is stretching its move above its trigger and zero lines. However, the Ichimoku lines are turning marginally lower, indicating a possible downside retracement.
An upside rally above the nine-month high of 109.22 could drive the market towards the 109.90 barrier, taken from the high in June 2020. More increases could take the bulls even higher, testing the 112.20-112.40 resistance area.
On the other side, a step lower could send the pair until the immediate support at 108.15 ahead of the 107.00 handle. Even lower, the door could open for the 20-day SMA at 106.47 ahead of the 105.70 barrier.
To sum up, USDJPY has been in an extremely bullish bias in the short-term, while any significant drop below the 200-day SMA may shift this view to neutral.
Origin: XM
