USD/JPY Price Analysis: Rebounds from the vicinity of a short-term ascending trend-channel support

• USD/JPY recovers around 75 pips from sub-107.00 levels and moves back closer to session tops.
• The set-up seems tilted in favour of bulls and support prospects for a further appreciating move.

The USD/JPY pair managed to recover a major part of its early slide to sub-107.00 levels and is currently placed just a few pips below the Asian session swing high, around mid-107.00s.

From a technical perspective, the recent recovery from multi-year lows has been along an ascending trend-channel formation and support prospects for a further near-term appreciating move.

This coupled with the fact that technical indicators on hourly charts have been gaining positive traction reinforces the constructive outlook on the back of a broad-based US dollar strength.

However, oscillators on the daily chart – though have been recovering from the bearish territory – are yet to catch up with the momentum and warrant some caution for aggressive bullish traders.

Hence, it will be prudent to wait for some strong follow-through buying, possibly beyond the 107.70-80 supply zone, before traders start positioning for any further near-term appreciating move.

The pair then might surpass the 108.00 round-figure mark and aim towards testing last week's swing high, around mid-108.00s, before eventually darting towards the top end of the mentioned channel.

On the flip side, any meaningful pullback below the 107.00 round-figure mark might continue to attract some dip-buying near the 106.75 region, which if broken might negate the bullish outlook.

USD/JPY 1-hourly chart

Technical levels to watch