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USD/JPY Awaits Breakout from Mini-Consolidation

USD/JPY has been consolidating since last Friday in a narrow range roughly between 107.10 and 107.40. The 1H chart shows a range that is in the middle of a sharp bullish trend. The uptrend is clearly represented by price action, moving averages and the RSI reading. A break above 107.40 would therefore simply continue the trend. 

(USD/JPY 1H Chart 9/15)

Where would the uptrend go? We'll take a look at the monthly chart below to see the next key levels.But first, what if there is a break below 107.10. In that scenario, we might see some downside risk toward the 136.64 and then the 136-136.05 area a support pivot from last week. Still the outlook in the medium-term would be bullish.

The bullish outlook has room to run. When we look at the monthly chart, we see that price is pushing above the 200-month SMA with the monthly RSI pushing above 70 repeatedly. This shows bullish bias and momentum at work, but also suggests that the market might be a bit overbought.

There was a support pivot at 108.96 that might provide some resistance along with the overbought condition. Thus, if price breaks above 107.40, the upside risk remains toward the 108.95-109 area, but we should look for some consolidation here as the monthly RSI pushes above 70.

(USD/JPY Monthly Chart 9/15)