- USD/JPY remains muted on Tuesday in the early Asian session.
- More losses for the pair if price breaks 20-day SMA.
- Momentum oscillators warn caution for any aggressive directional bets.
USD/JPY extends the previous day’s sluggish move on Tuesday morning in the Asian trading hours. The pair opened lower as compared to the previous day’s closing price.
At the time of writing, USD/JPY is trading at 110.38, up 0.02% so far.
USD/JPY daily chart
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On the daily chart, the USD/JPY pair is facing strong resistance near the descending trendline from the high of 111.63.
USD/JPY bulls trade below the 20-day Simple Moving Average (SMA) placed at 110.39.
The Moving Average Convergence Divergence (MACD) indicator trades in the positive trajectory with a bullish stance. This reading could be translated into further higher price action.
If price sustained above the intraday high, it could move towards the high of July 7 at 110.81.
A daily close above the 23.6% Fibonacci retracement level, which extends from the low of 108.56, at 110.88 would bring the 111.00 mark back in the picture. The bulls would then aim for the 111.40 horizontal resistance level.
Alternatively, if price moves lower, it could be retracted back to the mentioned 20-day SMA.
The USD/JPY pair will make the next move towards Friday’s low of 110.08 followed by the 109.85 horizontal support level.