- The USD/JPY will rebound from 106.60 area, has stalled below 108.00
- The dollar faces resistance at the 50-day SMA, and an ex-tops-in-the-108.00/05 area
The US dollar’s slight rebound of the mid-range from 106.00 last week has been arrested, to 108.00, where the pair seems to be facing significant resistance area.
The USD/JPY has picked up earlier this week, with the yen a little weaker in the middle of a moderate recovery, on the appetite for risk. The Initial plan, in order to facilitate corona virus restrictions in the major economies have strengthened the hopes of an economic recovery, which fuelled riskier assets against the refuge japanese yen. The pair, however, has been unable to expand to accommodate 108.00″, and it remained nearly flat in the last session.
The daily chart shows the USD/JPY limited below an important resistance barrier around 108.00. The 50-day SMA, which has capped the pair on September 11 and 12, and now resides at 107.95, and right above it there is the 61.8% retracement of the February-March decline concurring with the middle and the end of April, it is top to 108.00/05.
The dollar should break above the area in order to increase bullish momentum. In this case, the next target would be at 100 and 200-day smas around 108.30/40 on its way to 109.38 (April 4). On the downside, immediate support is at 107.30 (May 19 low) and below, 106.60 (13 May low) and 106 (6 and 7 May low).