Forex: USD/JPY rallies on European session (Barcelona) - The risk aversion bottomed at 77.95 low on the USD/JPY chart and the European morning saw investors speculating higher chances of an earlier than expected Spanish bailout request triggered by the market reaction on the Spain's credit rating downgrade by S&P. However, this improved sentiment eases the pressure on Spain and doesn't help the objective of seeing the OMT programme in action.

The USD/JPY has risen to 78.45 high ahead of the US jobless claims, US trade balance data and the G7 Finance ministers meeting. The pair might extend gains further as the price action isn't giving up on the upside.

“We suspect that the market is tracing out a bullish falling wedge pattern”, wrote Commerzbank analyst Karen Jones, considering that positive, but can only confirm with a close above the cloud resistance (79.00), and preferably a close above the 200 day ma at 79.36. Until then, “we must allow for further consolidation and possible stabs lower”, she added.