The USD/JPY continues to toss and turn near important resistance and, even as it has seen a rather strong reversal lower in the past day, the Forex pair remains within the range of its higher price band. Traders who favor the upward momentum of the USD/JPY have enough technical and behavioral sentiment reasons to continue pursuing the higher trend.
The USD/JPY was testing the 110.000 mark only to fall to the 109.450 vicinity the past day where it continues to languish. Importantly, the Forex pair remains above a critical support juncture which has proven durable the past week. If the current value within the USD/JPY is sustained between the 109.400 to 109.300 levels, it could be a strong indication tthat further buying power is going to develop. A cautious support target appears to be the 109.200 ratio.
After testing highs on the 3rd and 4th of June which touched values in the USD/JPY not seen since early April, the Forex pair has seen some selling. In April, the 109.300 level also proved to be important, and when support eroded, the USD/JPY traded to a low of nearly 107.600 towards the end of April.
However, since the 26th of April, the USD/JPY has incrementally pushed higher. The USD/JPY is one of the biggest Forex pairs globally. Its transaction volumes are enormous and small reversals should always be expected by speculators. However, the Forex pair also has a habit of delivering adequate trends which traders can pursue.
While it may feel rather adventuresome for traders to be buyers of the USD/JPY as it traverses its current price ratio near 109.400, this support area may prove to have rather durable strength as a guardian against lower moves while using stop-loss marks near the 109.300 to 109.200 levels. Technically, it looks as if the USD/JPY has the capability of seeking higher ground and potentially demonstrating that the recent reversal lower was a normal cyclical reaction within the Forex market after touching mid-term highs late last week.
From a risk/reward perspective, there still seems to be more ground that can be attained via buying positions compared to wagers which seek bearish momentum. Traders should be cautious with the USD/JPY and use their risk-taking tactics with appropriate care, but being a buyer within these lower short-term prices being displayed may be worthwhile.
USD/JPY Short-Term Outlook:
Current Resistance: 109.880
Current Support: 103.200
High Target: 110.500
Low Target: 108.840
