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USD/JPY in a Bullish Flag Breakout

After Friday's US NFP report, the USD/JPY rallied sharply from around 117.25 to almost 119.25. The 200-pip rally then stalled and the pair retreated to close the week and to start this one.

USD/JPY 1H Chart 2/10
(click to enlarge)

The pair formed a flag pattern and broke above that consolidation pattern today (2/10). Also that since crossing above the moving averages (200-, 100-, and 50-period), price has bounced off the 50-hour SMA. This is a bullish slingshot and suggests further upside. Also note that the RSI held above 40, a sign that the bullish momentum from Friday is maintained.

On the daily chart, we can see that the bullish continuation scenario is also being challenged by a descending triangle resistance around 119.50. A break above 119.50 would put the pair above the triangle and the 50-day SMA, which should liberate the bullish outlook towards the 121.70, 2014-high with risk of USD/JPY pushing higher.

USD/JPY Daily Chart 2/10

(click to enlarge)