USD/JPY attracts buying interest; 50% Fibonacci eyed.
USD/JPY has finally revived some bullish power, spiking above its shorter-term simple moving averages (SMA) and the Ichimoku cloud to reach one-month highs slightly above the 108 level.
Technically, the market could retain positive momentum in the short-term as the RSI, the Tenkan-Sen and the MACD all point upwards in the bullish area.
The 108.40 handle, which is the 50% Fibonacci of the down-leg from 112.39 to 104.44, is currently in view and any significant step above this mark may likely bring a more important barrier between the 109.00 level and the 200-day SMA in the spotlight. Another break higher would scrap the downward pattern from the 112.39 level and push resistance up to 110, while further up the 78.6% Fibonacci of 110.70 should be the next level to watch.
In case of a downside reversal, the 38.2% Fibonacci of 107.47 could provide nearby support before attention turns to the 107.00 round-level. A steeper decline would put the pair back into the August neutral zone while a takeout of the 23.6% Fibonacci of 106.33 could open the door for a drop to the 105.50-105.00 area.
Meanwhile, in the three-month window, the bearish outlook switched to neutral following the rally above 107.00. The sentiment could further improve if the price manages to successfully overcome the 110 number.
Summarising, USD/JPY is likely to maintain its bullish appetite in the short-term, though in the medium-term an upturn above 110 is required to restore positive sentiment.
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