Being stranded by the 55-, 100– and 200-hour SMAs, USD/JPY entered a minor period of consolidation on Thursday morning. Strong bullish momentum mid-session contributed to a northern breakout and subsequently led the pair even up to the 107.50 mark where the monthly R1 is located.
It is likely that the US continues to appreciate against the Yen during the following hours. The nearest resistance is set by the weekly R1 and the 38.20% Fibo retracement at 107.75 and 108.08, respectively.
However, bulls might soon exhaust their strength and go for a minor correction during the second part of the day, as technical indicators are gradually moving towards the overbought territory. This decline is unlikely to surpass 107.00 due to several important support levels being located there.