- 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.
Monthly chart
-637465267906615418.png)
From a monthly perspective, the price is stalling within a downtrend and is potentially headed for a restest of prior support.
Weekly chart
-637465268422249923.png)
The weekly chart shows the price has retested the support and is now due for a continuation to the upside.
Daily chart
-637465268845890061.png)
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.
4-hour chart
-637465269272420337.png)
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.
USD/CHF
-637465269689653318.png)
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
-637465270092815820.png)
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.
DXY monthly
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.
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