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USD/JPY Signals Bullish Continuation; 122 is Key

USD/JPY stayed above 118 last week, and rallied above 120, breaking what appears to be a triangle resistance. Combined with the fact that the RSI pushed above 60, this signals at least a lost of bearish bias. It might be an early signal of bullish continuation, but the 122 level will be critical.

USD/JPY Daily Chart 10/25

(click to enlarge)

We can see that 122 is a previous resistance area. The 100-day simple moving average resides around 122. A break above 122.10 with the RSI also tagging 70 would be another phase in the bullish continuation scenario. I rather wait for this confirmation, and a subsequent pullback to consider a bullish continuation buy. At that point, my theory is that price should not come back below 120. If it does, the bullish scenario is weakened. If price stays above 120 after a pullback, there would be even more evidence of a bullish continuation scenario that would put at least the 124 level in sight, with upside risk back to the 2015-high of 125.85.