• USDJPY gains strong traction and pushed through a one-week-old descending trend-line.
  • Mixed technical indicators on hourly/daily charts warrant caution for aggressive traders.
  • Any further move up is more likely to confront a stiff resistance near the 105.40-45 zone.
  • Failure to defend 105.00 mark should pave the way for a retest of September swing lows.

Having defended the key 105.00 psychological mark, USDJPY edged higher on Thursday and is now looking to build on the momentum beyond a one-week-old descending trend-line resistance. A subsequent move beyond 100-hour SMA, around the 105.40 region, will mark a short-term bullish breakout and set the stage for a further appreciating move.

 

Meanwhile, technical indicators on the 1-hourly chart have been gaining positive traction and support prospects for additional intraday gains. However, oscillators on 4-hourly/daily charts are yet to recover from the negative territory and warrant some caution before placing any aggressive bullish bets amid the prevalent risk-off mood.

 

Hence, any follow-through move beyond the 105.40-45 region, coinciding with the 38.2% Fibonacci level of the 106.10-105.03 downfall, is more likely to confront a stiff resistance near the 105.60 area (50% Fibo. level). That said, a sustained breakthrough could trigger a short-covering move and lift the pair back towards reclaiming the 106.00 mark.

 

On the flip side, immediate support is pegged near the 105.20 horizontal level ahead of the 105.00 handle. A convincing break below will negate any near-term positive outlook and turn the pair vulnerable to slide back towards retesting September monthly swing lows support near the 104.00 mark.