USD/JPY Price Analysis: Trying to form a base near 200-hour SMA, above 107.00 mark

• USD/JPY seesawed between tepid gains/minor losses through the early European session.
• The intraday bias seems tilted in favour of bullish traders, albeit warrant some caution.
• A convincing break below the 106.65-60 support will confirm a fresh bearish breakdown.

The USD/JPY pair lacked any firm directional bias on Thursday and remained confined in a narrow trading band, above the 107.00 mark through the early European session. The upbeat market mood undermined the safe-haven Japanese yen and extended some support, albeit sustained US dollar selling kept a lid on any meaningful positive move.

Nevertheless, the pair now seems to have formed a strong base near 200-hour SMA, which should act as a key pivotal point for intraday traders. Meanwhile, technical indicators on hourly charts have been gaining some positive traction and have also recovered from the bearish territory on the daily chart, though are yet to confirm a positive outlook.

Hence, any meaningful appreciating move is likely to confront a stiff resistance near a descending trend-line, extending since the beginning of this week. The mentioned hurdle is currently pegged near the 107.25 region, which if cleared decisively might be seen as a key trigger for bulls and set the stage for a move towards weekly tops, around the 107.55 region.

On the flip side, sustained weakness below the 107.00 mark will negate any positive bias and turn the pair vulnerable to accelerate the slide back towards the 106.65-60 strong horizontal support. Some follow-through selling should pave the way for further decline, back towards June monthly swing lows support near the 106.05-106.00 region.

USD/JPY 1-hourly chart

Techincal levels to watch