Can the support area hold
The USDJPY is higher on the day, but with a narrow trading range (only 27 pips). The pair is off the high and is backtracking into the swing area between 110.35 to 110.418 (see red numbered circles of the swing levels in that area). The low reached 110.392 and currently trades at 110.46. Hold the area and the bias is more bullish.
The high price today stalled near the 61.8% at 110.531 (high reached 110.542 and backed off). The swing highs from July 23/26 come in at 110.587. Those levels are targets on more upside momentum. Get above them and the door opens to the July 14 high at 110.693 and then another swing area at 110.81 area.
Move below 110.35 now and traders will look toward 110.277 (high from July 28 and near lows today) followed by the 50% midpoint of the move down from the July high (and high for 2021) at 110.184.
I like to think of the midpoint as a key retracement level. It is where the market see-saw is balanced. Ultimately, if dollar sellers come in, they would need to get below that midpoint and stay below. Absent that, and the buyers are more in control. As the Fed shifts to an earlier taper, it might take a different story line now (i.e. stock fall sharply perhaps).