USDJPY stepped on the 20-day simple moving average (SMA) and the ascending trendline and reversed a large part of the latest pullback from a two-month high of 110.32.
Concomitantly, the price managed to add a new higher low to the short-term upward pattern which started in late April, flagging that the bulls remain in play ahead of the FOMC policy announcement today at 18:00 GMT. That said, a decisive close above the 110.32 peak is currently required to boost buying interest towards the one-year high of 110.95. Any violation at this point would reactivate the broader 2021 uptrend, with the price likely crawling into the key 2020 resistance area of 111.35 – 112.21.
The technical oscillators embrace the above positive scenario as the RSI is pointing upwards again after refusing to cross below its 50 neutral level. The fast-Stochastics are also sailing northwards, while the MACD, although somewhat muted, is trying to gain momentum above its red signal line.
For the bears to get control, the price should tumble below the trendline and its 20- and 50-day SMAs seen within the 109.46 – 109.10 region. In this case, the nearby support zone of 108.55 – 108.32 may attempt to delay any downfall towards the key 107.80 – 107.47 area, where any close lower would downgrade the 2021 bullish outlook, likely prompting a sharper decline towards the 200-day SMA currently at 106.36.
In brief, USDJPY is exposed to additional upside corrections, though a clear move above 110.32 is required to confirm that.