Technical Analysis – USDJPY takes a breather before rallying again

USDJPY has rebounded off the 113.40 support level with the simple moving averages (SMAs) following the market action. However, the MACD oscillator is diving below its trigger line in the positive region, while the RSI is sloping down around the 70 level. Both are suggesting that the next move may be to the downside rather to the upside.

If the pair slips below the 113.40 barrier, it could take the market towards the 20-day SMA at 113.00 ahead of the 112.07 support. Driving lower, the bears could meet the 40-day SMA at 111.53 before challenging the 110.45-110.80 area.

In the positive scenario, a jump beyond the almost four-year high of 114.70 could open the door for the 115.50 resistance, taken from the peak on March 2017.

To sum up, USDJPY has been in a strong positive mode over the last six months, remaining well above the ascending trend line. Only a fall below the 200-day SMA at 109.35 may change the current outlook.

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