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USD/JPY Looking to Confirm the Bullish Breakout

USD/JPY has been bearish in 2015 falling from around 120.75 to 115.85 last week. This week, the pair is showing a possible turnaround.

USD/JPY 4H Chart 1/23
(click to enlarge)

After rebounding from 115.85, USD/JPY rallied above 118 to make the first higher high of signifiance in 2015. Then it broke above a falling trendline that has represented the downtrend in 2015. The RSI pushed above 60, showing loss of the prevailing bearish momentum, but it did not tag 70 which would have shown development of bullish momentum. 

Also, price failed to break above 119, which raises doubts about the bullish breakout. After all, it is still holding below the 200-period SMA in the 4H chart. 

Then it pulled back. After a couple of strong support above 117.00, the USD/JPY remains at the crossroad, but has gained some bullish bias. After today's rally, USD/JPY looks poised again to test 119.

A break above 119 opens up firs tthe 120 handle.

USD/JPY Daily Chart 1/23

(click to enlarge)

The daily chart shows that at 120, price will run into a triangle resistance that represents a medium-term consolidation since December. If price breaks above 120, it will open up the 2014-high at 121.70. Otherwise, the first downside risk will be to 118. Below that, price has the 115.56-116 area in sight. Because the prevailing trend is intact (since 2011), we should limit any bearish outlook right now to 115.50. I would also favor the bullish outlook because USD/JPY is in a secular bull market that has not shown signs of slowing down outside of the short to medium-term.