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USD/JPY Outlook: Overbought Daily Studies Warn Of Correction Before Bulls Continue

Bulls are taking a breather on Tuesday, following strong bullish acceleration in past eight days which peaked at 109.23 today (the highest since June 8), but faced headwinds from 200WMA (109.00) and Fibo 38.2% of 2015/2016 125.84/98.99 fall (109.25).

Bulls tightened grip after last Friday’s close above pivotal Fibo barrier at 108.23 (61.8% of 111.71/102.59 descend), but strongly overbought daily RSI and stochastic and easing bullish momentum suggest price adjustment before bulls resume towards targets at 109.59/110.00 (Fibo 76.4% / psychological).

Corrective dips are expected to provide better buying opportunities, with initial support at 108.23 (broken Fibo 61.8%, reinforced by rising 5DMA) guarding rising 10DMA (107.29) which should contain deeper dips and keep bulls in play.

Res: 109.00, 109.25, 109.56, 110.00.
Sup: 108.55, 108.23, 107.81, 107.29.