USD/JPY consolidates gains, limited by 117.50

USD/JPY printed a fresh daily high at 117.49 during the American session. The US dollar is up across the board on the first trading day of 2017. Market volatility remains low.  

The pair is consolidating above 117.30, on its way to a daily gain of around 40 pips. The pair has eased last week losses. So far, the upside remains limited by 117.50. A break higher could clear the way for a test of 117.80/85 (last week highs). 

USD/JPY technical outlook 

Valeria Bednarik points out that the USD/JPY pair remains technically bullish in the short-term. “The 1 hour chart shows that the price has recovered above its 100 and 200 SMAs, with the largest offering an immediate short term support at 117.32, while the Momentum indicator heads north at fresh 2-week highs and the RSI consolidates around 65, all in line with a new leg higher on an extension beyond 117.60, the immediate resistance.”

The pair is about to post the second daily gain in a row. Last week, the retreat from multi-month highs found support around the 20-day moving average, that currently stands at 116.30/40 and bounced to the upside. On a wider perspective, the upside bias could remain intact as long as USD/JPY avoids a daily close under the mentioned line.