James Chen
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USD/JPY breaks out towards major 100.00 resistance

USD/JPY (daily chart) has broken out above both a descending parallel channel extending back to early July as well as the 50-day moving average. Prior to the breakout, the currency pair had been trading in a range within the descending channel and between two key moving averages – the 200-day to the downside and the 50-day to the upside. Since early August, the 200-day moving average has provided accurate price support within the context of the general bullish trend.

Despite the noted descending channel and gradual correction to the downside that has taken place since the May multi-year high at 103.72, USD/JPY is still moving within the confines of a longer-term, overall uptrend as reinforced by the 200-day average. The current channel breakout has brought the pair up to approach the key 100.00 resistance level, a price that was last approached just a month ago. With continued upside momentum, a breakout above 100.00 could be the catalyst for a continued bullish trend with upside resistance objectives at 103.00, then a retest of the 103.72 high, and then further up towards the 105.00 level.