- USD/JPY bulls are lining up and awaiting bullish environment and break of 4-hour resistance.
- Market correlations add conviction to the upside bias.
USD/JPY has corrected a significant portion of the medium-term bull trend and would now be expected to move higher.
The following illustrates the bullish bias on a top-down analysis across the time frames and also used USD/CHF and CHF/JPY analysis to confirm the thesis.
From a monthly perspective, the price is stalling within a downtrend and is potentially headed for a restest of prior support.
The weekly chart shows the price has retested the support and is now due for a continuation to the upside.
The daily chart is fractal of the weekly with the price testing the support, establishing and now likely to extend the bullish trend which is typical of a W-formation.
The 4-hour conditions are ripening into a bullish environment.
The price would be expected to break resistance and retest it as support before continuing higher.
The yen and CHF are correlated and we have seen the horse already bolt on the USD/CHF daily chart.
The yen would be expected to follow suit and therefore be expected to enable the trader more conviction in long USD/JPY.
CHF/JPY represents the weakness in the CHF displayed on USD/CHF.
However, CHF/JPY could be on the verge of a bullish correction given the price now meets support. A pullback would typically equate to a bid in USD/JPY as the yen weakens.
The US dollar is firm and would be expected to continue higher from the lows in a correction of the monthly downtrend to at least a 38.2% Fibonacci retracement. This would bode well for USD/JPY longs.
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.