- The USD / JPY resumes offers after its last u-turn of 105.29.
- A monthly resistance line, previous support, joined the bearish MACD to challenge the bulls.
- The 61.8% Fibonacci retracement of the July-August upside limits immediate declines.
USD / JPY climbs to 105.61, up 0.25% on a day, in Monday’s pre-European session. The yen pair recently picked offers as market sentiment turned positive amid hopes of a coronavirus (COVID-19) vaccination. Moreover, the receding uncertainty surrounding Japan’s leadership after Prime Minister Shinzo Abe has further propelled the mood for risk.
While portraying the same, the S&P 500 Futures refreshes a record above 3,500, while Asia-Pacific stocks are dominated by gains of over 1.9% from Japan’s Nikkei 225.
As a result, the quote extends its Friday rebound on key Fibonacci retracement support to challenge the previous support line, at 105.67 now.
However, the bearish MACD and multiple failures to cross the same support turned into resistance are questioning optimists.
Even if the pair manages to break through the resistance at 105.67, a confluence of 100 and 200 bar SMA level near 106.10 acts as the key filter to the upside.
Alternatively, a downside breakout of 105.27, including a 61.8% Fibonacci retracement, needs to be validated from the monthly low of 105.10 to the target 104.80 and the late July low near 104. , 20.
Four hour chart USD / JPY
Trend: expected decline