FX.co ★ USD/JPY Reversal About To Happen

USD/JPY edges higher as the USDX and JP225 are trying to increase. Also, its failure to reach fresh new lows signals that the sentiment cloud change soon. The Yen depreciates even if the Japanese data has come in line with expectations or better in the last days.

On the other hand, the current week could be crucial for the USD, the NFP, Unemployment Rate, Average Hourly Earnings, and today's ADP Non-Farm Employment Change could dictate direction.

USD/JPY Strongly Bullish!

USD/JPY has passed above the R1 (104.64) level and now is targeting the downtrend line. A valid breakout above this dynamic resistance could lead to a bullish reversal. You have to be careful because the downtrend line represents a strong dynamic resistance, any false breakout with great separation or a major bearish engulfing could send the rate down again.

Technically, an up reversal will be validated by a new higher high, jump above 105.67 and beyond the median line (ml).

• USD/JPY Trading Conclusion

A valid breakout (breakout followed by at least a retest) above the downtrend line could represent a first long signal. The second buying opportunity will come out after passing and stabilizing above the median line (ml) and above the R3 (105.72).

The 107.00 and the upper median line (uml) of the ascending pitchfork could be used as short-term targets.