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Technical Analysis: USDJPY bounces off 10-day SMA as risk reset welcomes Japanese traders

In addition to the receding death-toll due to coronavirus from China, claims that Beijing managed to find a cure to the deadly virus seems to have triggered the risk reset on Tuesday. It's worth mentioning that the return of Japanese traders from the long holiday, due to Monday's the Emperor's Birthday, also favored the recovery in trade sentiment. As a result, the USDJPY pair bounces off 10-day SMA towards challenging Friday's low near 111.50. However, the pair's further upside could be tamed by overbought RSI conditions and the monthly-top close to 112.20. If at all prices manage to cross 112.20 on a daily closing basis, May 2019 high surrounding 112.40 could check the bulls.

On the downside, the pair's declines below 10-day SMA level of 110.60 can take aim at January month high near 110.30, followed by 110.00 round-figure. In a case where the quote stays weak below 110.00, there are multiple supports around 109.60 marked during late-2019 that might question the sellers.