Yesterday’s slight recovery in the US dollar has dragged the USD/JPY higher above 106.00 level. The pair is now all set to test the next resistance at 106.55 while another resistance that can well be tested is at 106.85. The immediate support is at 105.80, other supports are present at
105.40 and 105.24 levels.
The mid-Bollinger band is at 105.97 and supports an upwards move towards 106.77. The SMA- 21 is indicating support at 106.04 and the longer period average (SMA-50) is showing support at 106.44. The Relative Strength Index seems to be crossing above the neutral zone.
The price pattern on the 4-hourly period is strong and favors a buying entry. A reasonable intraday entry would be at 106.10. Based on the price momentum the target should remain small between 45 to 55 pips. A tight stop-loss for this trade would be just below the 105.80 support level.
Bulls would need a closing above 106.55 to keep the control. On the downside, closing below 105.40 could once again trigger a bearish movement towards 104.60.
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