- USD / JPY shows resistance below the 104.00 level and attracts some buying at lower levels on Monday.
- The intraday setup favors bullish traders, through oscillators on the daily chart that warrant caution.
The USD / JPY is building on its positive intraday move, from below the 104.00 level, and has reached new daily highs during the middle of the European session. However, the rally has lacked a solid continuation, with the bulls having a hard time capitalizing on the move beyond the 200 hourly SMA.
The mentioned level is near the 104.20-25 region, which coincides with the 50% Fib retracement of the recent bearish move from 104.75 to 103.67 and should act as a short-term key point. This, in turn, should help determine the intraday movement of the USD / JPY pair.
Meanwhile, the technical indicators on the 1-hour chart are just beginning to move into the positive territory and support the prospects for further gains. However, the oscillators on the daily chart have yet to confirm the constructive outlook and warrant caution for the bulls.
This makes it prudent to wait for a sustained move past the 61.8% Fibonacci, around the 104.35 zone, before positioning for any further bullish movement. The USD / JPY pair could accelerate momentum towards the 104.75 resistance zone before targeting the key psychological level of 105.00.
On the other hand, the 38.2% Fibonacci, around the 104.10-05 region, now appears to defend the immediate drop. This is closely followed by the daily lows, around the 103.95 region. In the event of a decisive breakdown, they would negate any positive short-term bias.
USD / JPY 1 hour chart
USD / JPY technical levels
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