USD/JPY battles 50-DMA after Tuesday’s solid rebound.
100-DMA saved the day for the USD/JPY bulls.
DXY rebound could lead to acceptance above 50-DMA but RSI remains bearish.

USD/JPY is consolidating the recent recovery, having almost tested the 110.00 level earlier in the Asian trades.

The spot finds support from the renewed buying interest seen around the US dollar, as markets turn risk aversion once again amid looming Delta covid variant concerns.

As observed on the daily sticks, the rebound in the spot appears capped by the horizontal 50-Daily Moving Average (DMA) at 109.96.

A daily closing above the latter is needed to confirm a bullish reversal from two-month troughs of 109.06 reached earlier this week.

The next upside target aligns at the July 16 high of 110.34, above which buying opportunities could open up towards the slightly bearish 21-DMA at 110.46.

However, the 14-day Relative Strength Index (RSI), hovering below the midline, warrants caution for the bulls.

Therefore, a failure to find acceptance above the 50-DMA barrier could recall the sellers, exposing the ascending 100-DMA support at 109.49 on another occasion.

The 109.00 round number will then challenge the downside. Further south, the bulls could seek some reprieve at the horizontal trendline support at 108.61.

Read More