The USDJPY currency pair is already in a short-term ascending channel. From a theoretical perspective, it is likely that the pair may continue to extend gains within the channel soon. In this case the move could face the monthly Pivot Point of 106.00.
However, on a large trend basis the pair remains bearish, as the bulls have not been able to break the solid barrier, as you can see on the chart. There are several balance zones which are circled in red. The price remains below the 200 EMA (red), and the channel aisle also tends downward, even though the divergences look real.
The intraday bias would need to remain neutral in order to consolidate below a temporary peak of 105.70. Bulls are in charge as long as the psychological level 105.00 holds. A break of 105.70 would continue the rebound from the short-term base of 104.00 and increase the chance for a bullish reversal to the resistance of 106.94 for confirmation. However, on the downside, a close below 105.00 could turn bias back to the downside to retest 104.00.
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Adi Phangestu
Market Analyst – HFIndonesia
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