- USD/JPY reverses the previous day’s recovery from weekly low, sidelined of late.
- Firmer RSI, sustained break of weekly resistance line keeps Yen buyer hopeful.
- Bulls need validation from 131.70 to keep the reins.
USD/JPY seesaws around 131.50 as buyers struggle to extend the previous day’s rebound amid a sluggish start to Thursday’s trading in Europe.
In doing so, the Yen pair struggles to justify Wednesday’s upside break of a downward-sloping resistance line from Monday, as well as the recovery from the 200-bar Exponential Moving Average (EMA). Adding strength to the bullish bias could be the steady run-up of the RSI (14) line, not overbought.
Even so, multiple hurdles marked since Monday challenges the immediate upside near the 131.60-70 horizontal area.
Following that, the USD/JPY rally toward the monthly high of 132.90 can’t be ruled out.
It’s worth observing that the pair’s successful trading above 132.90 will aim for the previous monthly peak surrounding 134.80.
Alternatively, a convergence of the 200-EMA and the previous resistance line challenges the USD/JPY bears around 130.70.
Following that, the 50% and 61.8% Fibonacci retracement level of the pair’s February 02-06 upside, respectively near the 130.50 and 130.00 round figure, will be in focus.
Should the Yen pair remains bearish past 130.00, the odds of witnessing a slump toward the multi-month low marked in January, around 127.20, can’t be ruled out.
To sum up, USD/JPY remains on the bull’s radar despite the latest inaction.
USD/JPY: Hourly chart
Trend: Further upside expected