- USD / JPY bounces off lows and climbs back above the 105.00 level at the start of the European session.
- The breaking of a descending wedge is confirmed on the 15-minute chart.
- The RSI remains within the bullish territory.
The USD / JPY pair has managed to recover its initial losses and is trying to extend the bounce above the 105.00 level at the start of the European session, having reached daily lows at 104.86 during the Asian session.
The short-term technical setup has turned in favor of the bulls, following the confirmed upside breakout of a descending wedge on the 15-minute chart a couple of hours ago.
Therefore, buyers are now aiming to test the 100-period bearish SMA at 105.13. A break above that level would lead to a retest of the daily highs at 105.17.
Higher up, the 200-period SMA at 105.27 is likely on the bulls’ radar. The RSI has turned down, but remains well above the midline, suggesting that the margin for a further rise in the pair remains intact for the next few hours.
At the time of writing, the pair is flirting with the 50-period SMA around the 105.00 level, looking for a sustained move above this level.
Looking down, the 104.93 level offers immediate support, where the 21-period SMA and resistance of the pattern now become support converge.
The next target for the bears remains the daily low of 105.86, below which the psychological level of 105.50 will come into play.
USD / JPY 15 minute chart
Credits: Forex Street
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