The USDJPY is gaining bullish traction after breaking above a key confluence zone that included the 200-hour moving average and the 50% retracement of the May decline, between 144.124 and 144.257. This area had capped the pair earlier, but today’s rally clears that hurdle and shifts near-term bias to the upside.
On the downside, buyers stepped in earlier in the US session today ahead of the 200-bar moving average on the 4-hour chart, which now acts as a support level along with the broader swing area near 143.573–143.02.
Looking ahead, the next upside target comes in at 144.73, which represents the 100-bar moving average on the 4-hour chart. A break above that level would further solidify bullish momentum and open the path toward more meaningful resistance zones near 145.30 and above.
On the downside, a move back below the 200-hour moving average at 144.124 would be a setback for buyers and undermine the recent bullish breakout. Earlier today, sellers initially defended the area around the 200-hour MA and the 50% retracement, but the eventual break above marked a key shift in momentum, putting buyers back in control. Holding above this zone keeps the upside bias intact.
This article was written by Greg Michalowski at www.forexlive.com.