USD/JPY Anchoring to the Upside

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USD/JPY Anchoring to the Upside

The USD/JPY signaled bullish continuation last week, but has since stalled. Still, the bullish bias is in play. Let’s take a look at the technical developments that are anchoring the USD/JPY to further upside.

Last week, price broke above a triangle consolidation pattern that has been forming since December. This breakout could be reviving an uptrend since 2012, and exposes at least the 121.70, 2014-high.

However, we can see that there is a pullback after the breakout. We can assess the reaction to this pullback to see if the bulls are still in charge. Indeed, in the 4H chart, we can see price holding above the cluster of simple moving averages and the 4H RSI holding above 40 after tagging 70. Therefore we still have bullish bias and momentum. With today’s low made above last week’s low after the pullback, the market is showing more evidence that USD/JPY is ready to head up again.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.