USDJPY had been trading within a downward sloping channel since mid-October when the price peaked at a 32-year high of 151.94. Nevertheless, the pair managed to break above this pattern in early February, with its strong advance currently approaching the 200-day simple moving average (SMA).
This positive short-term bias is also endorsed by the momentum indicators. Specifically, the RSI has jumped above its 50-neutral mark, while the stochastic oscillator posted a bullish cross within the 80-overbought zone.
If the upside tendency persists, initial resistance could be encountered at the 200-day SMA currently at 137.00. Piercing through that barrier, the price could ascend towards the December resistance region of 138.15. Should that barricade fail, the bulls might aim for the 142.24 peak registered in mid-November.
On the flipside, bearish actions could send the price to test the December support of 133.60. A break below that zone may shift the attention to 131.55, which acted as both support and resistance in the past two months. Failing to halt there, further declines could cease at the February support of 129.80.
Overall, USDJPY appears ready to recover a significant part of its losses after its bearish pattern broke to the upside. Therefore, the test of the 200-day SMA could prove to be the next decisive factor for the pair’s trajectory.