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USD/JPY to Test Consolidation Resistance Again

The USD has been strong for the past few sessions. The USD/JPY is rallying sharply to test its recent consolidation range.

USD/JPY 4H Chart 5/19

(click to enlarge)

USD/JPY has been trading in a range roughly between 118.33 and 120.84 since the end of March. The market shows price and moving averages moving in a messy but ultimately sideways manner. The RSI oscillated between 70 and 30. This almost 2-month long consolidation is setting up for a strong breakout. This week, it looks like price is going to test that 120.84 resistance. A break above would open up the 2015-high around 122 and maintain a bullish bias within a multi-month consolidation range.

USD/JPY Daily Chart 5/19

(click to enlarge)

As we can see int he daily chart, the prevailing trend before the consolidation started in December 2014 has been bullish. Thus, the short-term bullish outlook can easily extend into a medium-term one above the current high of 122.02. Only a break below 118.33 would take away the bullish bias, and only a break below 115.55 should open up a bearish outlook outside of the short-term.