USDJPY has settled at the 109.35 level, which is the 61.8% Fibonacci retracement of the down leg from 112.39 to 104.64. The positive picture is intact despite the stalling in the price, which is aided by the flattened Kijun-sen line and easing in the short-term oscillators.
The MACD is above its red trigger line deep in the positive zone, while the RSI, currently in the overbought territory, is turning marginally up at the 70 level. Moreover, the return of the price above the 200-period simple moving average (SMA), the rising Tenkan-sen line and the nearing of a bullish crossover of the 100-period SMA by the upward sloping 50-period MA support positive advances.
To the upside, initial resistance could come from the 109.60 level and swing high of 109.92 from May 30. Climbing higher, the 76.4% Fibo of 110.50 and neighboring 110.67 resistance could halt further gains to fill the gap from May.
If sellers retake control and dip below the 109.35 point where the Tenkan-sen line is also located, the 109.00 handle could hinder the drop towards the 108.87 to 108.73 support region, where the SMAs and the Ichimoku cloud reside. Penetrating below the cloud, the 50.0% Fibo of 108.41 could challenge the bears ahead of the trough of 107.88.
In brief, the short-term bias looks bullish and a break above 109.92 would reinforce the positive outlook. However, a break below the 50.0% Fibo of 108.41 could shift the bias to neutral, while below 107.88 could develop a bearish bias.
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