USD/JPY Price Analysis: 110.20-25 continues to cap ahead of Powell’s speech

• USD/JPY seesawed between tepid gains/minor losses through the early North American session.
• Investors now seemed reluctant to place fresh bets ahead of Fed Chair Jerome Powell’s speech.
• A sustained move beyond a one-week-old trading range should pave the way for additional gains.

The USD/JPY pair attracted some dip-buying on the last day of the week and climbed back to the 110.20-25 supply zone during the early North American session, albeit lacked follow-through. The pair held steady in the neutral territory, around the key 110.00 psychological mark and had a rather muted reaction to the release of the US Core PCE Price Index.

From a technical perspective, the USD/JPY pair has been oscillating in a familiar trading band over the past one week or so. The 110.20-25 area marks the top boundary of the mentioned range, which if cleared decisively will be seen as a fresh trigger for bullish traders. The pair might then aim to surpass monthly swing highs, around the 110.80 region and reclaim the 111.00 mark.

Meanwhile, oscillators on hourly charts maintained their bullish bias and have been gaining positive traction on the daily chart. The set-up supports prospects for an eventual breakout to the upside. That said, investors seemed reluctant to place aggressive bets, rather preferred to wait on the sidelines ahead of the Fed Chair Jerome Powell's speech at the Jackson Hole Symposium.

On the flip side, any meaningful slide below the 110.00 mark might continue to find decent support near the 109.75 horizontal level. This is followed by the trading range support, around mid-109.00s. Sustained weakness below will shift the near-term bias in favour of bearish traders and drag the USD/JPY pair below the 109.00 mark, towards monthly swing lows, around the 108.70 region.

USD/JPY 4-hour chart

Technical levels to watch