The USD/JPY has been in a persistent uptrend since July when it rallied from a common low on the year around 101. We saw price stall below 119.00 in the past couple of weeks, but price appears to be in a bullish continuation mode again as it pushes above 119.
Brief Consolidation: The 4H chart shows that price consolidated for about a week below 119 and managed to crack a rising speedline. However, this bearish correction attempt was weak because it failed to push below the 117.00 handle. and essentially continued the uptrend after the a-b-c correction.
Bullish Continuation: Furthermore, the 200-, 100-, and 50-period SMAs in the 4H chart remain sloping up and in bullish alignment, while price stayed above all three SMAs (If left the SMAs out of the chart because they took up the bottom of the chart and squeezed price action – I wanted to put focus on the price action instead). It should also be noted that the 4H RSI held above 40 during this consolidation, showing maintenance of the bullish momentum.
Last week, there was a push above 119, followed by a a pullback, which found support around 118. Then traders made another push to clear USD/JPY above the 119 handle confirming the bullish continuation signal.
At this point, a break below 117.75 might suggest further consolidation or bearish correction. And a break below 117.00 would be a stronger sign of topping for the short to medium-term.
Upside: Otherwise, USD/JPY is poised to push to 120, and some common highs around 120.60 seen in the monthly chart.
Multi-Year Highs: As we can see the 120.63 level is a common high going back to 2003. There is also some further room to extend beyond this level towards the 2007 high at 124.16 before any major resistance or material consolidation to be seen on the monthly chart.
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