USD/JPY continues to consolidate above 106.000 however, the trading range remains narrow between 105.90 and 106.55. On technical grounds, the pair’s upward momentum is starting to improve as the US dollar Index once again seems muted. USD/JPY is currently trading at 106.22, the immediate support is at 106.00 other support levels are at 105.80 and 105.65. The intraday resistance is at 106.55.
The SMA-21 is indicating support at 106.05 and the SMA-50 is showing support area at 106.27. The mid-Bollinger band is at 106.10 while the upper-Bollinger band shows a resistance area at 106.69. The RSI is flat at 50 indicating the consolidation period. The price pattern in the 4-hourly period is slightly more bullish and favors a buy trade. A decent intraday buying level would be near 106.10 with a relatively small target of 40 to 50 pips. A tight stop-loss for this trade would be just below the 105.80 support level.
A weekly closing above 106.60 may accelerate the upwards momentum in the coming week. The downside still seems limited, however, closing below 105.80 may prompt further sell-off in the pair.