The USDJPY has kicked off the week with a hint of positivity, but the bulls are facing a challenging battle to gain control. The 20-period simple moving average (SMA) in the 4-hour chart is proving to be a tough barrier for the bulls to overcome. While both the stochastics and RSI have turned upwards, the momentum seems weak and unsustainable. The price has managed to edge above the 20-period SMA, but it is struggling to break through the Tenkan-sen line of the Ichimoku cloud. Additionally, the Kijun-sen line is looming above the price near the 154.00 level.
Hurdles Ahead for Bulls
In order for the recent rebound from near three-month lows to gain traction, the price must successfully navigate through these obstacles. Breaking above the 155.00 region and targeting the 50-period SMA at 155.40 are crucial steps before attempting to re-enter the Ichimoku cloud. However, if the upside momentum falters and the price slips back below the 20-period SMA, a retest of the July 25 low at 151.93 could be on the cards. A breach of this level would further solidify the bearish short-term outlook. Moreover, a sustained drop below the 200-day SMA around 151.62 would shift the medium-term perspective to bearish territory.
Hope Amidst Numerous Obstacles
While there is still a glimmer of hope for the ongoing rebound to establish a firmer footing, there are multiple challenges lying ahead. The bulls may find themselves halted by these barriers, impeding their progress. The uncertain nature of the current momentum raises doubts about the sustainability of the positive price action. Traders will be closely monitoring the price action around the key resistance levels in the coming days to determine whether the bulls can overcome the uphill struggle they are facing in the battle for USDJPY.
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