- USD / JPY is fighting the 50-day SMA after Tuesday’s solid bounce.
- The 100-day SMA saved the day for the USD / JPY bulls.
- The USD bounce could lead to acceptance above the 50 SMA, but the RSI is still bearish.
The USD / JPY pair is consolidating the recent rally, climbing just above the 110.00 level at the start of the European session on Wednesday.
The pair finds support in renewed buying interest around the US dollar as markets return to risk aversion amid concerns about the Delta variant of covid.
As seen on the daily chart, the pair’s rebound appears limited by the 50-day moving average at 109.96.
A daily close above this level is needed to confirm a bullish turn from the two-month lows of 109.06 reached earlier this week.
The next target on the upside is at the July 16 high of 110.34, above which buying opportunities could open towards the 21-day SMA at 110.46.
USD / JPY daily chart
However, the 14-day RSI, which is below the midline, warrants caution for the bulls.
Therefore, a lack of acceptance above the 50 SMA could attract sellers, exposing the 100 SMA support at 109.49 again.
The round level of 109.00 will challenge the decline. Lower down, the bulls could look for some support at the horizontal line at 108.61.