USD/JPY Price Analysis: Range play continues around 100-hour SMA, below 107.00 mark

• USD/JPY lacked any firm direction and remained confined in a range below 107.00 mark.
• Mixed technical picture warrants some caution before placing any fresh directional bets.

The USD/JPY pair extended its sideways consolidative price action through the mid-European session and remained confined in a narrow trading band around 100-hour SMA, below the 107.00 mark.

Given last week's sustained break through a one-week-old descending trend-channel, the set-up seems tilted in favour of bulls and supports prospects for a further near-term appreciating move.

Slightly bullish technical indicators on the 1-hourly chart add credence to the constructive outlook amid some renewed USD buying, albeit the prevalent risk-off mood warrants some caution.

Moreover, oscillators on 4-hourly/daily charts have been struggling to gain any meaningful traction, making it prudent to wait for some follow-through buying before placing fresh bullish bets.

Bulls are likely to wait for a sustained strength above 200-hour SMA, around the 107.15 region, before positioning for a move back towards last week’s swing high, around the 107.40-50 area.

Above the mentioned supply zone, the pair is likely to surpass the 108.00 mark and make a fresh attempt to clear the very important 200-day SMA hurdle near the 108.25-30 region.

On the flip side, 106.65-60 horizontal zone now seems to protect the immediate downside and is closely followed by six-week lows support near the 106.40-35 region, set last week.

Failure to defend the mentioned support might negate the positive outlook and set the stage for the resumption of the recent bearish trend, possibly towards testing sub-106.00 level. 

USD/JPY 1-hourly chart