USDJPY Resumes Rebound but 50-day SMA Caps Advance

USDJPY has gained some ground in the short term after its last decline stopped at the 130.40 region. However, the recent price recovery has been repeatedly held by the ascending 50-day simple moving average (SMA).

The momentum indicators suggest that near-term risks are tilted to the upside. Specifically, the stochastic oscillator is leveling off in its 80-overbought area, while the MACD histogram has jumped above its red signal line but remains in negative territory.

If positive momentum were to strengthen and the price crosses above its 50-day SMA, initial resistance could be encountered at the recent peak of 135.57. Conquering this barricade, the bulls could then target the 137.55 barrier. An upper breach of the latter could set the stage for the 24-year high of 139.37.

Alternatively, if selling pressures arise, the pair could descend to challenge the 132.50 hurdle. Slipping below that floor, the recent low of 130.40 could be the next support zone for the price. Any further declines may then stop at the May low of 126.40 before the spotlight turns to 121.20.

Overall, the near-term picture for USDJPY seems to be steadily improving, but the 50-day SMA has proven to be a tough resistance barrier for the bulls. However, a drop below the 130.40 floor could change the technical picture back to negative.