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USD/JPY targeting new highs

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The USD/JPY pair rallied as the Dollar Index has managed to rebound after its retreat while the Japanese Yen Futures registered a new sell-off. It’s trading at 122.08 at the time of writing and it seems determined to approach and reach new highs as the bias remains bullish.

Fundamentally, the Tokyo Core CPI rose by 0.8% versus 0.7% expected and versus 0.5% growth in the previous reporting period, while the SPPI registered a 1.1% growth versus 1.2% estimates. On the other hand, the USD received a hit from the US economic data, the Revised UoM Consumer Sentiment came in at 59.4 points below 59.7 expected, the Pending Home Sales dropped by 4.1% even if the traders expected a 1.0% growth, while the Revised UoM Inflation Expectations rose by 5.4%.

USD/JPY Uptrend Unharmed!

Despite poor US data, USD/JPY remains bullish. In the short term, it challenges the weekly R3 (122.05) which represents an upside obstacle. Technically, as long as it stays above the immediate uptrend line, the bias remains bullish, USD/JPY could approach and reach new highs.

Still, after its amazing rally, we cannot exclude a temporary retreat. A potential corrective phase could help us to catch a new leg higher. Testing and retesting the uptrend line could bring new long opportunities.

USD/JPY Forecast!

Closing and stabilizing above the R3 (122.05) could signal an upside continuation. On the other hand, if this obstacle holds, the USD/JPY could come back down to test and retest the uptrend line before developing a new bullish momentum. A new higher high, jumping and closing above 122.43 may activate more gains.

An upside continuation could be invalidated by a valid breakdown below the uptrend line. This scenario could announce a larger drop towards the next uptrend line.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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