USD/JPY Price Analysis: Bulls eyeing a move beyond 105.00 mark on positive vaccine news

Positive COVID-19 vaccine news prompted some aggressive short-covering around USD/JPY.
A four-month-old descending trend-line might cap any subsequent move beyond the 105.00.
Mixed technical indicators on daily/1-hourly charts further warrant caution for bullish trades.

Haresh Menghani FXStreet

The USD/JPY pair witnessed some aggressive short-covering move on Monday and was being supported by the latest optimism over a potential vaccine for the highly contagious coronavirus disease. The strong intraday momentum pushed the pair to three-day tops, with bulls now awaiting some follow-through buying beyond the key 105.00 psychological mark.

From a technical perspective, any subsequent positive move is likely to confront a stiff resistance near a four-month-old descending trend-line. The mentioned barrier is currently pegged near the 105.35-40 region, which coincides with last week's swing highs and should now act as a key pivotal point for the USD/JPY pair's near-term trajectory.

Meanwhile, technical indicators on the daily chart are yet to catch up with the strong intraday recovery move and already flashing overbought conditions on the 1-hourly chart. The set-up warrants some caution for bullish traders and positioning for any further appreciating move, making it prudent to wait for a sustained move beyond the trend-line hurdle.

On the flip side, the 104.45-30 congestion zone now seems to protect the immediate downside. Failure to defend the said support level will negate prospects for any further positive move, instead prompt some fresh technical selling. The USD/JPY pair might then turn vulnerable to slide back below the 104.00 mark and accelerate the fall towards the 103.35 region.

USD/JPY daily chart

Technical levels to watch

USD/JPY

Overview
Today last price	104.84
Today Daily Change	1.54
Today Daily Change %	1.49
Today daily open	103.3

Trends
Daily SMA20	104.78
Daily SMA50	105.29
Daily SMA100	105.91
Daily SMA200	107.01

Levels
Previous Daily High	103.76
Previous Daily Low	103.18
Previous Weekly High	105.35
Previous Weekly Low	103.18
Previous Monthly High	106.11
Previous Monthly Low	104.03
Daily Fibonacci 38.2%	103.4
Daily Fibonacci 61.8%	103.54
Daily Pivot Point S1	103.07
Daily Pivot Point S2	102.83
Daily Pivot Point S3	102.49
Daily Pivot Point R1	103.65
Daily Pivot Point R2	103.99
Daily Pivot Point R3	104.23

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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