- The rebound of the dollar and mixed Asian stocks leave the dollar / JPY in limbo.
- The spot is trapped in a rising channel, risks a corrective slip.
- Bulls to maintain the reign so long above 21-HMA, eyes on the American data.
The USD / JPY is currently holding around 108.90, consolidating the rally in the upside to new two-month highs at 109.04.
The spot is divided between a general rebound in the US dollar and a mixed sentiment on Asian stocks, as lingering tensions between the United States and China continue to cast a dark cloud over the story of the global economic recovery.
Attention is now shifting to Thursday’s jobless claims data and Friday’s nonfarm wage data for the next major direction.
Before economic events in the United States, the price is likely to cross into a potential upward channel formation, the natural trend suggesting an increased likelihood of correction after the recent surge.
The upside bias will probably remain intact as long as the spot remains above the support of the simple moving average (HMA) at 21:00 on a slope, now at 108.83. The Hourly Relative Strength Index (RSI) has become flat but still remains above the center line, suggesting that bulls still have a chance to take over.
If support 21-HMA fails, the corrective slide will accelerate to test support for the trend line at 108.62.
The selling pressure will intensify below the aforementioned support, as the model is confirmed. The bears will then target the model’s target at 107.86. However, new offers could emerge at 108.51, the bullish 50-HMA before trying to break out to levels below 108.
On the other hand, only a daily closing above the handle 109 will open the doors for a new rise.