USD/JPY: the key resistance at 109.70 has come under scrutiny again

USD/JPY

The bull swing higher that came in the wake of the dialling down of geopolitical tensions has been running out of steam as the key resistance at 109.70 has come under scrutiny again. This seems to be a key moment as consistently over recent months we have seen resistance levels tested and even if breached, only manage to do so on an initial break basis. Subsequent consolidation has followed a break only to then retrace. Into Monday morning, the bulls are still looking well set for now, but momentum indicators are pulling higher towards key ranging levels again. The RSI has tended to come a cropper around the 60/65 mark, whilst Stochastics struggle just as they get towards 80 (around where they are now). It is for this reason, we would view any prospective break above 109.70 with caution. Initial resistance would then be at 109.90 before 110.65, however beware the often seen retracement. Initial support at 109.00/109.20.