USDJPY posted a double bottom around the 106.00 psychological mark, retaining the neutral outlook that has been holding since March 26.
The sideways behavior is endorsed by the short-term momentum indicators. The RSI is hovering around its neutral threshold of 50 with weak movement, while the MACD is flattening near the zero level. Meanwhile, the simple moving averages (SMAs) keep moving horizontally slightly above the current market price, backing the neutral outlook as well.
In case the bulls successfully overcome the 20- and 40-day SMAs, immediate resistance could occur near the 38.2% Fibonacci retracement level of the up leg from 101.15 to 111.70 at 107.66. Higher, the 108.15 barrier could be the next target, while marginally above that line, the 200-day SMA could act as a crucial level for investors. Breaking that level too, the focus will turn to the 23.6% Fibonacci of 109.20 and the upper boundary of the range near the ten-week peak of 109.83. Beyond the latter, optimism for more bullish actions could strengthen, bringing the 111.70 hurdle next into view.
On the flip side, another test of the 50.0% Fibonacci of 106.43 and the 106.00 mark could be expected, however, a decline below these levels would resume a bearish structure, pushing support towards the 61.8% Fibonacci of 105.19. Below that, the next key level to watch could be the 41-month trough of 101.15.
Summarizing, USDJPY has been consolidating over the last four months below the 109.83 mark. A rise above the 112.20 – 112.40 area could shift the outlook from neutral to bullish in the medium term.