USD/JPY Price Analysis: Bullish bias intact while above 21-HMA in potential rising channel

USD/JPY holds steady around 108.90 at the moment, consolidating the renewed uptick to fresh two-month highs of 109.04.

The spot is divided between broad-based US dollar rebound and mixed sentiment on the Asian equities, as lingering US-China tensions continue to cast a dark cloud on the narrative of global economic recovery.

The focus now shifts towards Thursday’s US Jobless Claims and Friday’s Non-Farm Payrolls data for the next direction in the major.

Ahead of the US economic events, the price is likely to traverse in a potential rising channel formation, with the natural tendency suggesting increased odds of a correction after the recent surge.

The bullish bias will likely remain intact so long as the spot holds above the upward sloping 21-Hourly Simple Moving Average (HMA) support, now at 108.83. The hourly Relative Strength Index (RSI) has turned flat but still trades above the midline, suggesting the bulls still have some chance to regain the baton.

Should the 21-HMA support give way, the corrective slide will pick up pace to test the rising trendline support at 108.62.

Selling pressure will intensify below the aforesaid support, as the pattern will get confirmed. The bears will then aim for the pattern target at 107.86. However, fresh bids could emerge at 108.51, the bullish 50-HMA, before attempting a break towards sub-108 levels.

On the flip side, only a daily closing above the 109 handle will open doors for further upside.

USD/JPY: 1-hour chart

USD/JPY: Additional levels