- USD/JPY gains traction for the second consecutive session on Tuesday.
- Bulls seemed struggling to extend the momentum beyond 109.00 mark.
The USD/JPY pair gained some positive traction for the second consecutive session on Tuesday and jumped to multi-day tops during the mid-European session. The pair might now be looking to extend the momentum further beyond the 109.00 round-figure mark.
The mentioned handle coincides with 38.2% Fibonacci level of the 110.30-108.31 recent pullback from multi-month tops and 200-hour SMA. A sustained strength above the said barrier might be seen as a fresh trigger for bullish traders and open the room for additional gains.
Meanwhile, technical indicators on hourly charts have been gaining positive traction and reinforce the constructive set-up. However, oscillators on the daily chart are yet to catch up with the ongoing recovery move and warrant some caution for aggressive traders.
Hence, it will be prudent to wait for some strong follow-through buying beyond the 109.20 region before positioning for any further appreciating move, possibly towards reclaiming the key 110.00 psychological mark en-route multi-month tops, around the 110.30 region.
On the flip side, 23.6% Fibo. level – around the 108.75 region – now seems to protect the immediate downside, which if broken might negate the positive outlook and prompt some fresh technical selling. The pair then might accelerate the slide back towards the 108.30 area.
USD/JPY 1-hourly chart