USD/JPY Price Analysis: Bulls challenge symmetrical triangle resistance
|- USD/JPY added to its recent positive move and gained traction for the third straight session.
- The formation of a bullish pennant on the daily chart supports prospects for further gains.
- Only a sustained break below the 109.40-35 region will negate the near-term positive bias.
The USD/JPY pair edged higher for the third consecutive session on Tuesday and climbed to one-and-half-week tops, around the 110.15 region during the first half of the European session.
The USD/JPY pair was last seen hovering near a resistance marked by a downward sloping trend-line, extending from YTD tops touched in March. This, along with another ascending trend-line, constitutes the formation of a symmetrical triangle on the daily chart.
Given the strong positive move from YTD lows, or sub-103.00 levels touched in January, the mentioned triangle might be categorized as a bullish continuation pennant chart pattern. A sustained move beyond will set the stage for an extension of the near-term appreciating move.
The constructive setup is reinforced by the fact that oscillators on the daily chart have just started gaining positive traction. A subsequent move beyond monthly swing highs, around the 110.30-35 region will reaffirm the bullish breakout and prompt some technical buying.
The USD/JPY pair might then aim to retest YTD tops, around the 111.00 neighbourhood. The momentum could further get extended towards the next relevant hurdle near the 111.50-55 region, though bulls might be reluctant to place aggressive bets ahead of the FOMC.
On the flip side, the 109.70-65 horizontal zone now seems to protect the immediate downside ahead of the triangle support, currently near the 109.40-35 region. Sustained weakness below will negate any near-term positive bias and turn the USD/JPY pair vulnerable.
The next relevant support is pegged near the 109.00 round figure, below which the USD/JPY pair could extend the corrective slide further towards the 108.70-60 support zone.
USD/JPY daily chart
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.