The USD/JPY pair rose to 113.19 yesterday as expected and extended gains further to 113.39; the highest level Nov. 14.
Currently, the spot is trading at 113.29 and as per the chart studies, looks set to extend gains to 114.00 levels ahead of the weekend.
- Inverse head and shoulders breakout.
- 5-MA, 10-MA curled up in favor of the bulls.
- Bullish 50-MA, 100-MA crossover.
- Bullish 5-MA and 200-MA crossover.
- Bullish RSI.
The spot looks set to extend the rally to at least 114.00 levels. The inverse head and shoulders breakout have opened doors for 115.38 (inverse head and shoulders breakout target as per the measured height method). Also, bull flag breakout (confirmed yesterday) could translate into a rally to 114.18.
The pair may have a re-look at levels below the neckline support to shake out the weak bulls.
- Higher lows and higher highs - Sharp rebound from 111.99 (Dec. 6 low) followed by (yesterday's) close above113.09 (Dec. 4 high) has established higher lows and higher highs pattern. It indicates the bulls have regained control.
- The bullish breakout on the 4-hour chart adds credence to the solid rebound from the rising trend line support seen on the monthly chart above.
- Hence, the pair looks ready to revisit 114.0 - the trendline sloping downwards from the Aug. 2015 high and Dec. 2015 high.
The spot could easily extend gains beyond 114.18 (bull flag breakout target) if the US wage growth numbers beat estimates. On the other hand, a weak data could yield a pullback in the USD/JPY. However, only a close today below 111.99 (Dec. 6 low) would abort the bullish view.
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 securities. 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 Forex 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.