USDJPY appears to remain stuck between the boundaries of 105.09 and 107.00, as the Ichimoku lines echo a momentum deprived market. The gradually slipping simple moving averages (SMAs) hold a fairly flattened tone, aiding the current directionless price action.
Furthermore, the short-term oscillators also reflect the absent directional momentum. The MACD, slightly below zero, hovers above its red signal line while the advancing RSI resides at its 50 threshold.
To the upside, immediate resistance may arise from the cloud’s lower surface and the 50-day SMA, which happens to be at the 106.43 level, that being the 50.0% Fibonacci retracement of the up leg from 101.17 to 111.71. Nudging above this, buyers may challenge the ceiling of the short-term consolidation period at 107.00, where the 100-day SMA also lies. Successfully extending above the cloud the pair may meet the 38.2% Fibo of 107.67, prior to the critical 200-day SMA at 107.87 and the 108.16 peak overhead.
If sellers resurface, steering below the Ichimoku lines of 106.05 and 105.59 respectively, the foundation of the horizontal pattern, from the 61.8% Fibo of 105.20 to the 105.09 low, could prevent further losses from materialising. Should it fail to do so, the key support section 104.18 – 104.50 may attempt to terminate the decline. Another plunge may then rest at the 76.4% Fibo of 103.66 ahead of the 103.09 trough.
Concluding, the short-term picture sustains a neutral structure and an initial break either above the 107.00 handle or below the 105.09 trough would be required to set the next course.
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