USD/JPY Price Analysis: 50-day SMA again proves a tough nut to crack

• USD/JPY erases gains after rejection at the 50-day SMA. 
• The average has capped upside multiple times this month. 

USD/JPY is now trading largely unchanged on the day at 107.17, having faced rejection at the 50-day simple moving average (SMA) hurdle at 107.36 at 01:15 GMT. 

The 50-day SMA has capped upside for the third straight day and also worked as stiff resistance on June 15 and June 16. 

As a result, acceptance above the 50-day SMA hurdle at 107.36 will likely invite stronger chart-driven buying pressure, possibly yielding a quick rally to the 200-day SMA at 108.37. 

On the downside, 106.00 is the level to beat for the bears. This is because, strong buying pressure was observed around that level in the first week of May and during the last week, as shown by the long wicks attached to the respective weekly candles. 

A breakout above 50-day SMA may be seen if the S&P 500 futures manage to hold on to and extend minor gains seen at press time. The futures were down 0.5% in early Asia as the number of coronavirus cases across the globe rose above 10 million over the weekend. The early losses have been reversed on the back of encouraging news related to coronavirus vaccine out of China.

Daily chart

Trend: Neutral

Technical levels