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USD/JPY Breaks Above key Resistance

Many USD-crosses opened with a gap to start the week. They were all in the direction of USD-strength, though EUR-weakness for example has kept the EUR/USD from closing the opening gap. 

The USD/JPY rallied barely cracked a key resistance pivot from April at 104.13. However, after the open gap to start the week, price is retreating from 104.26. 

USD/JPY 1H Chart 8/25

(click to enlarge)

The 1H chart shows that USD/JPY has closed the gap. Price has returned to around the 104 psychologically stick handle, and the 50-hour simple moving average (SMA). The RSI has returned to 40. This is a combination that suggests buyers are around this area, around 104. So far we are seeing traders in early US session defend the 103.90 level. There is an outside bar that engulfed the previous 2 hourly candles, so in the near-term, the bullish continuation scenario seems to be gaining. 

If price does say goodbye to the 104 handle, USD/JPY might be looking to say hello to the 105.44 high on the year, which is the next target/resistance. 

If the 1H RSI falls back below 30, and price back below 103.50, we might need to shelve the bullish outlook for some short-term consolidation, that might retest the previously broke resistance at 103, as support. But for now, the outlook remains bullish toward 105.44.